I often stress history because it tells a lot of lessons.
When I was a kid....in 1968....a burger at McDonalds cost eighteen cents. The soda at the school break area? It was ten cents.
Seven years later? The same burger would cost you around thirty cents, and the soda would have cost around twenty cents. A substantial rise? Yeah....partly because of the economy, and partly because of the escalation of oil pricing.
I did some research. If you were around in 1970 and desiring college in Utah....you would have paid around $390 for the entire year....for tuition. Books, food and housing would have been the substantial stumbling block for your lifestyle. Today? That year of tuition at the same university in Utah is $7000. The books, food and housing? Probably triple what they were in 1970.
In 1940, you could have bought a simple plain wood house....for around $3,920. Today, in a non-urban area....like Alabama....you'd need to spend around $65,000 to get the same plain house.
In 1970, you could buy gas for around thirty-six cents a gallon. Filling the tank up? It would around five bucks.
For the greater part of the 1970s....economists generally agree that most folks when thrust into unemployment.....were there for fifteen weeks. Today? It's closer to being greater than thirty-seven weeks (more than double). You then consider that there weren't advertised jobs off the internet, highly trained HR squads in companies, or fancied-up resumes in existence. You generally had some typist fix up one generic resume and made a few copies of it. In effect, we have three times the effort, the cost, and the delay built into hiring today.....than in 1970.
Industry jobs? The economists say that we had around eighteen million Americans in 1970's industry. Today? We barely have twelve million occupying jobs in industry. Automation, foreign production, and smarter production values all helped. There's probably one million Vietnamese folks who are today part of the American industrial cycle....supporting the needs of America....while residing in Vietnam. If you had said that in 1970....people would have laughed you out of the room.
Locking things? In 1970....most folks NEVER locked their car-doors, and probably over half of America never locked the door to their house. Today? We not only lock the car-doors, but we invested in car alarms and various devices to defeat the thugs. Our homes? Alarms installed, and we all have guns in various corners to meet the thugs head-on.
Economists will tell you that in 1970....roughly one in fifty Americans were on some type of public assistance (food stamps, welfare, etc). Today? One in six. Who paid for the difference? Well....you the taxpayer. Could we eventually get it down to one in four? Yeah, probably so.
In 1970, I had access to four channels (ABC, NBC, CBS, and the Alabama Public Access channel....the educational channel as we called it). Today? My dad has the satellite TV deal fixed up and could have four-hundred channels flowing into the house. To be honest, once it got up to ten possibilities....that was all we kinda needed. The rest? Just wasted digital space.
You'd think there was some lesson learned out of this history lesson. But no.....there's nothing much we can learn. We are simply walking toward further out and wondering just how big a mess you could fall into.
Wednesday, 21 May 2014
Monday, 12 May 2014
A Story of a Haircut
It's not a story that will get told on CNN or in your local paper. If you browsed around, there might be a dozen newspapers in the entire US that carried the story, and it'd just be forgotten real quick anyway.
So, two guys go for a haircut.
In a normal typical day.....tens of thousands of guys go for a haircut. Most have a preferred barber. They have a routine......stepping in...reading the local news....maybe sipping some coffee. The TV might be on, or the barber might be chatting away on NCAA football, a Baptist revival, or discussing the best way to brew garage-beer.
In this particular case....the barbershop is in Yemen....a far piece from American soil. The two customers? One was a CIA guy and the other a Army special forces Lt Col. It's safe to say....that in Yemen....you do as the locals do, and you carry a gun on you.
For some reason, these two guys were picked from the various folks coming and going at the embassy there in Yemen, and were supposed to be kidnapped.
The kidnapper crew? I'm not sure if they really had much of a plan, or if the head mullah of the local Muslim facility just said a few magic words and figured it'd all be fine.
Well....our two American guys pull their pistols out and kill the two terrorists. Reports won't indicate the shape of the barbershop after the event.....but it's safe to say that there's no more issues ever to arise from these two fine young gentlemen of a Muslim orientation. They've gone to the six-feet under world.
The barber? Well....there's not much said. I'm sure he's a bit shaken. He probably didn't get to finish the haircuts. And there's probably a reputation about his customers now.....they aren't the type to give easily.
This old world is not a peaceful place....or defined as a friendly place. You do stupid stuff....you end up six-feet under. You think about your place in life, and gauge the circumstances of which you'd like to enjoy. If you don't have much to live for.....obviously, you lack something....as these two young gentlemen did.
So, two guys go for a haircut.
In a normal typical day.....tens of thousands of guys go for a haircut. Most have a preferred barber. They have a routine......stepping in...reading the local news....maybe sipping some coffee. The TV might be on, or the barber might be chatting away on NCAA football, a Baptist revival, or discussing the best way to brew garage-beer.
In this particular case....the barbershop is in Yemen....a far piece from American soil. The two customers? One was a CIA guy and the other a Army special forces Lt Col. It's safe to say....that in Yemen....you do as the locals do, and you carry a gun on you.
For some reason, these two guys were picked from the various folks coming and going at the embassy there in Yemen, and were supposed to be kidnapped.
The kidnapper crew? I'm not sure if they really had much of a plan, or if the head mullah of the local Muslim facility just said a few magic words and figured it'd all be fine.
Well....our two American guys pull their pistols out and kill the two terrorists. Reports won't indicate the shape of the barbershop after the event.....but it's safe to say that there's no more issues ever to arise from these two fine young gentlemen of a Muslim orientation. They've gone to the six-feet under world.
The barber? Well....there's not much said. I'm sure he's a bit shaken. He probably didn't get to finish the haircuts. And there's probably a reputation about his customers now.....they aren't the type to give easily.
This old world is not a peaceful place....or defined as a friendly place. You do stupid stuff....you end up six-feet under. You think about your place in life, and gauge the circumstances of which you'd like to enjoy. If you don't have much to live for.....obviously, you lack something....as these two young gentlemen did.
Wednesday, 7 May 2014
A Little History over CD Rates
My brother will harp on this discussion topic a fair amount. CD rates at banks....are lousy.
In 2012, the six-month rate was around .63-percent.
In 2007, the year prior to the fall.....it was around 3.50-percent.
In 2000, before 9-11, it was 6.75-percent.
In 1997, in the midst of the Clinton-era, it was 6.70-percent.
In 1990, we were actually getting 7.50-percent for a six-month CD.
Toward the last six months of 1989, the six-month rate actually floated between 10.40-percent and 10.13 percent.
Toward the middle of the 1980s....the average CD rate for six-months floated around seven and eight percent.
For ALL of 1984.....the CD rate was ten to eleven percent.
In the first four months of 1980....we had this amazing monthly rate that ran: 13.48-Jan, 14.58-Feb, 17.74 for Mar, and 15.80 for Apr. Yeah.....it was an amazing period.
Most of the 1970s...the average CD rate ran around five to six percent a year. For five months in 1974.....we ran ten to twelve percent on the average six-month CD package.
Throughout most of the 1960s? It stood above five percent for every single month, and in a fair number of months....above six percent. Around mid-1969, we briefly tangled with eight percent for a couple of months.
The truth is....if you bring up the topic....most everyone under the age thirty don't remember much about CD rates, and they generally accept a rate of one percent as normal or average. For those over sixty.....they remember the glory days and how eight and nine percent....locked into an account for a year or five years....really mean something.
Why the low rates for such a long time? There's three basic reasons that the experts always bring up.
1. The US is now perceived as the prime place to park money internationally....because we are ultra-safe....compared to various Asian countries, Middle-Eastern areas, and the European Zone. So, the rich arrive...park their money....and there's no need for additional capital in US banks. To be honest.....they are overflowing, with other folks' money.
2. Bank reserves are at a all-time high....something is unique and unusual. Why pay more on CD rates....when you have the money sitting there?
3. The Fed's target for short-term rates is awful low.....which affects the perceived outlook for long-term rates....which is where CD rates would be affected. If the Fed said short-term perceptions were growing better....they'd raise their rates (something they quietly don't feel is good right now). For six years.....their perception on short-term rates has been AWFUL low and you'd have to wonder if there's more to the whole Fed story.
I went looking for rates in the 1930s....and the best I could find was savings rates. The typical savings account ran between .6-percent and 1.0-percent.....for a fair amount of the depression era. Toward 1936, it actually dropped to .1-percent, and for 1938/1939.....it was 0-percent. Yeah....ZERO percent.
The odds of it going back to three to five percent? Most economic experts say it's a cycle, and that it has to retreat back to a norm....sooner or later. Course, they don't want to guess when this cycle will end.
So when Uncle Karl drinks a bit, and reminisces over 1980 and how he got locked into seventeen percent interest for a couple of years with his savings....he's not joking. If he did a five-year CD....he turned better than seventy-percent growth over that period with his money. Today? Five years might get you six-percent growth over the entire period. This is why Uncle Karl drinks so much probably.
In 2012, the six-month rate was around .63-percent.
In 2007, the year prior to the fall.....it was around 3.50-percent.
In 2000, before 9-11, it was 6.75-percent.
In 1997, in the midst of the Clinton-era, it was 6.70-percent.
In 1990, we were actually getting 7.50-percent for a six-month CD.
Toward the last six months of 1989, the six-month rate actually floated between 10.40-percent and 10.13 percent.
Toward the middle of the 1980s....the average CD rate for six-months floated around seven and eight percent.
For ALL of 1984.....the CD rate was ten to eleven percent.
In the first four months of 1980....we had this amazing monthly rate that ran: 13.48-Jan, 14.58-Feb, 17.74 for Mar, and 15.80 for Apr. Yeah.....it was an amazing period.
Most of the 1970s...the average CD rate ran around five to six percent a year. For five months in 1974.....we ran ten to twelve percent on the average six-month CD package.
Throughout most of the 1960s? It stood above five percent for every single month, and in a fair number of months....above six percent. Around mid-1969, we briefly tangled with eight percent for a couple of months.
The truth is....if you bring up the topic....most everyone under the age thirty don't remember much about CD rates, and they generally accept a rate of one percent as normal or average. For those over sixty.....they remember the glory days and how eight and nine percent....locked into an account for a year or five years....really mean something.
Why the low rates for such a long time? There's three basic reasons that the experts always bring up.
1. The US is now perceived as the prime place to park money internationally....because we are ultra-safe....compared to various Asian countries, Middle-Eastern areas, and the European Zone. So, the rich arrive...park their money....and there's no need for additional capital in US banks. To be honest.....they are overflowing, with other folks' money.
2. Bank reserves are at a all-time high....something is unique and unusual. Why pay more on CD rates....when you have the money sitting there?
3. The Fed's target for short-term rates is awful low.....which affects the perceived outlook for long-term rates....which is where CD rates would be affected. If the Fed said short-term perceptions were growing better....they'd raise their rates (something they quietly don't feel is good right now). For six years.....their perception on short-term rates has been AWFUL low and you'd have to wonder if there's more to the whole Fed story.
I went looking for rates in the 1930s....and the best I could find was savings rates. The typical savings account ran between .6-percent and 1.0-percent.....for a fair amount of the depression era. Toward 1936, it actually dropped to .1-percent, and for 1938/1939.....it was 0-percent. Yeah....ZERO percent.
The odds of it going back to three to five percent? Most economic experts say it's a cycle, and that it has to retreat back to a norm....sooner or later. Course, they don't want to guess when this cycle will end.
So when Uncle Karl drinks a bit, and reminisces over 1980 and how he got locked into seventeen percent interest for a couple of years with his savings....he's not joking. If he did a five-year CD....he turned better than seventy-percent growth over that period with his money. Today? Five years might get you six-percent growth over the entire period. This is why Uncle Karl drinks so much probably.
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