http://mjperry.blogspot.com/2009/10/tradegy-of-commons.html
I will be out of town this weekend visiting my brother in Chicago so posting will be kept to a minimum until Monday. Please visit the above link from the Carpe Diem blog.
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On 10.31.09, In Posts, By Mario Balistreri
On 10.30.09, In Posts, By Mario Balistreri
On 10.30.09, In Posts, Quote of The Week, By Mario Balistreri
“Inflation is like sin; every government denounces it and every government practices it”.
Frederick Leith-Ross
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On 10.30.09, In Cartoon Of The Week, Posts, By Mario Balistreri
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On 10.29.09, In Posts, By Mario Balistreri
MB: Today being the 80th anniversary of the 1929 market crash, I would like to share with all of you developments made to the US Dollar over the last 80 years. We some times forget how important the US Dollar is, not just in our individual lives, but to our city, state, country and world. Recent economic conditions have caused many to question the value of the “almighty dollar”; I challenge those doubters to ask themselves what the dollar has done for them in their lives? Has it not bought you a home, food, transportation, and cloths? We owe tribute to our dollar, so with out further ado I give you 80 years of the dollar.
1929 – A Standardized Design
The first sweeping change to affect the appearance of all paper money occurred in 1929. In an effort to lower manufacturing costs, all currency was reduced in size by about 30 percent. In addition, standardized designs were instituted for each denomination across all classes of currency, decreasing the number of different designs in circulation. This standardization made it easier for the public to distinguish between genuine and counterfeit bills.
1957 – In God We Trust
The use of the National Motto "In God We Trust" on all currency has been required by law since 1955. It first appeared on paper money with the issuance of the $1 Silver Certificates, Series 1957, and began appearing on Federal Reserve Notes with the 1963 Series.
1990 – Security Thread and Microprinting
A security thread and microprinting were introduced to deter counterfeiting by advanced copiers and printers. The features first appeared in Series 1990 $100 bills. By Series 1993, the features appeared on all denominations except $1 and $2 bills.
1996 – Currency Redesign
In the first significant design change in 67 years, United States currency was redesigned to incorporate a series of new counterfeit deterrents. The new bills were issued beginning with the $100 bill in 1996, followed by the $50 in 1997, the $20 in 1998 and the $10 and $5 bills in 2000. The Bureau of Engraving and Printing announced that new designs would be undertaken every 7-10 years to stay ahead of currency counterfeiters.
2003 – The New Color of Money: Safer. Smarter. More Secure. The New $20 Bill
To stay ahead of currency counterfeiters, the U.S. government announces new designs to be issued. For the first time since the Series 1905 $20 Gold Certificate, the new currency will feature subtle background colors, beginning with the new $20 bill in October 2003.
2004- The New Color of Money: Safer. Smarter. More Secure. The New $50 Bill
The currency redesigns continue with the $50 bill, which was issued on September 28, 2004. Similar to the redesigned $20 bill, the new $50 bill features subtle background colors and highlights historical symbols of Americana – specific to the $50 bill are background colors of blue and red, and images of a waving American flag and a small metallic silver-blue star.
2006 – The New Color of Money: Safer. Smarter. More Secure. The New $10 bill
A redesigned Series 2004A $10 bill was issued on March 2, 2006. The "A" in the series designation indicates a change in some feature of the bill, in this case, a change in the Treasurer’s signature. Like the new $20 and $50 bills, the redesigned $10 bill features subtle shades of color and symbols of freedom – specific to the $10 bill are background colors of orange, yellow and red along with images of the Statue of Liberty’s torch and the words "We the People" from the United States Constitution.
The New $5 Bill: Safer. Smarter. More Secure.
On June 29, 2006, the U.S. government announced that it would redesign the $5 bill as part of ongoing efforts to enhance the security of U.S. currency.
2007- The New $5 Bill "Wi-5" Digital Unveiling
For the first time ever, the U.S. government revealed a new paper currency design through an all-digital unveiling, as the new $5 bill was unveiled to the public on September 20, 2007.
2008- The New $5 Bill: Safer. Smarter. More Secure
A redesigned Series 2006 $5 bill was issued on March 13, 2008. The redesigned $5 bill retains two of the most important security features that were first introduced in the 1990s and are easy to check. There are now two watermarks on the redesigned $5 bill. A large number "5" watermark is located to the right of the portrait, replacing the previous watermark portrait of President Lincoln found on older design $5 bills. Its location is highlighted by a blank window incorporated into the background design. A second watermark – a column of three smaller "5"s – has been added to the new $5 bill design and is positioned to the left of the portrait. The embedded security thread, which is located to the left of the portrait on older-design $5 bills, has moved to the right of the portrait on the redesigned $5 bill. The letters "USA" followed by the number "5" in an alternating pattern are visible along the thread from both sides of the bill. Similar to the $10, $20 and $50 bills, the new $5 bill also features the addition of color – light purple in the center of the bill, which blends into gray near the edges – and a new symbol of freedom – The Great Seal of the United States, featuring an eagle and shield
Source: http://www.squidoo.com/dollarhistory
Popularity: 2%
On 10.27.09, In Posts, Weekly Five, By Mario Balistreri
Gross Domestic Product (GDP): The total market value of all goods and services produced within the political boundaries of an economy during a given period of time, usually one year. This is the government’s official measure of how much output our economy produces. It’s tabulated and reported by the National Income and Product Accounts maintained by the Bureau of Economic Analysis, which is part of the U. S. Department of Commerce. Gross domestic product is one of several measures reported regularly (every three months) by the pointy-headed folks at the Bureau of Economic Analysis.
Goldsmith Banking: An analysis of banking functions based on the semi-realistic activities of the goldsmith profession of Medieval Europe. Because the gold used a production inputs by goldsmiths was also used as money, they developed many modern banking functions, including maintaining deposits, making loans, keeping reserves, and creating money. While the story of goldsmith banking is often embellished for instructional purposes, it does contain the essence of how goldsmiths operated as banks.
Gresham’s Law: A principle stating that bad money drives good money out of circulation. For this law to apply an economy clearly needs two types of money, one considered good and the other considered bad. Good and bad money in this context has nothing to do with the propensity to torture small animals or attempts at world domination. Good and bad are based on the official value in exchange versus value in use. Gold and silver, which were both used as money in the U.S. Economy in the 1800s, provides an illustration. Silver took on the role of "bad money" because it was relatively less value in use than gold. As such, people used silver as everyday money and stockpiled, or hoarded, gold. The silver bad money drove the gold good money out of circulation.
Group of Seven: The seven of the most advanced and industrialized nations of the world (abbreviated G-7)–the United States, Britain, France, Italy, Canada, Germany, and Japan–that meet regularly to coordinate fiscal and monetary policies. Their actions are based on the proposition that our global economy and the individual countries are better off through cooperation than conflict.
Guild: In medieval European times, a collection of artisans or merchants in the same occupation or industry, often in a particular location. Guilds were the forerunners of modern craft unions. They typical set quality standards and criteria for entry into the profession. Doing so allowed guilds to limit competition, monopolize their markets, keep prices high, and boost guild member incomes.
All definitions were provided by AmosWeb:
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=awb
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On 10.27.09, In Good, Bad, and Ugly, Posts, By Mario Balistreri
The Good
MB: The Rasmussen Consumer Index, which measures the economic confidence of consumers on a daily basis, increased by two points on Tuesday to 77.9. That’s down two points from a week ago and down three points from the level measured a month ago. Still, Consumer confidence is up 18 points since the start of the year, providing further evidence of economic improvement.
Contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of Realtors®. In addition home prices in 20 U.S. cities rose in August for the fourth consecutive month, bolstering the case that an economic recovery is at hand.
The Bad
MB: Congress and the administration are likely to extend the first-time-home-buyer tax credit. Simon Johnson and James Kwak of the Washington Post suggest that this is a bad idea and I agree with them. Advocates of the tax credit main argument is that it will stimulate the economy and stabilize the housing market.
From the Article: The National Association of Realtors claims that the credit created 350,000 new sales; the Calculated Risk blog calculates that this means the government is paying $43,000 for every extra house sold (since most sales would have happened anyway). According to the Wall Street Journal, Goldman Sachs estimates 200,000 new sales, implying a cost of $80,000 per marginal sale.
Even at a price of $43,000, what are we getting? Given that these are first-time home buyers, and given the glut of homes on the market, most of these are financial transactions where a house changes hands in exchange for cash (and additional transaction costs). The $43,000 is not being invested; it isn’t buying anything for the public, like a new road. It’s just cash going into people’s pockets.
Putting cash in pockets does have a stimulative effect because some of that cash will turn into consumption. But as far as stimulus measures go, it has a low multiplier (the ratio of new economic activity to stimulus spending).
But the tax credit stabilizes the housing market, people say. What does this mean? It means that the credit keeps housing prices artificially high. But housing is something that all people need. Why do we want it to be expensive? Would we want government policies that artificially push up the price of food? (Wait, we have some of those already . . . but that’s a matter for another column.)
As of July, the real price of housing, according to the Case-Shiller Composite 10 Index (adjusted using the consumer price index), was still 20 percent higher than in January 2000 and more than 30 percent higher than its average for the entire 1990s. Now, there is a risk that a weak economy can cause housing prices to fall well below their long-run average. However, housing prices appear to have stabilized, at least for now, and at too high a level. That is in part due to the tax credit, in part due to the partial economic recovery we are witnessing.
The Ugly
MB: Is there any hope of improvement for the Detroit housing market? Some may argue and evidence suggests that the housing market is getting better throughout our nation; however this is not the case for Detroit which is a urban wasteland. To further support the notion of a wasteland Detroit recently held a public auction for roughly 9,000 homes and lots in various conditions of abandonment and decay. Even with minimum bids starting at $500.00 the auction was a huge flop; less than a fifth of the Detroit land was sold after four days of auctions.
Sources: http://news.yahoo.com/s/nm/20091025/us_nm/us_usa_housing_detroit
http://www.realtor.org/press_room/news_releases/2009/09/record_roll
http://online.wsj.com/article/SB125664877982310163.html?mod=WSJ_hpp_LEFTWhatsNewsCollection
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/27/AR2009102703791.html
Popularity: 20%
On 10.26.09, In Posts, Weekly Favorites, By Mario Balistreri
Salute All Cars, Kids. It’s a Rule in China – New York Times
No One is Impressed by China’s GDP Growth – China Economic Review
Wake up and smell the ginseng – China Economics Blog
China, China everywhere – The Global Post
China Economy Better Than Expected – Asian Correspondent
Does China care about climate change – Ezra Klein
MB: A list of popular blog posts or news articles; no bias included.
Popularity: 3%
On 10.26.09, In Posts, Shocking! Posts, By Mario Balistreri
MB: Shocking! Numbers do not lie and many economic indicators suggest that conditions are improving. For example retail sales increased 2.7% in August, suggesting more consumers spending which is a driving force in the stability and improvement of our economy. However circumstances are still not great which has resulted in consumers being more cautious with their money’s; the amount US consumers are saving is amongst the highest in history at nearly 5%. One money saving strategy that has become increasingly popular over the last several months is renting products rather than buying them. Below is a list of several items that you probably did not know you could rent:
1. Power tools
2. Bikes
3. iPhones and other gadgets
4. Party supplies
5. Textbooks
6. Sports and fitness equipment
7. Camping Gear
8. Dogs
9. Gardens
10. Solar panels
11. Caskets
12. Designer handbags
13. Car Wheels
14. Gardens
15. A Wife
16. Celebrities
17. Sex Dolls
Okay, so you may be asking why would I rent some of these products? Well the idea is to again save money. For example many people find that they rarely use the expensive tools they bought to complete a single project. In fact, studies have shown that the average power tool is used for only about half an hour in its lifetime! For a better understanding of why an individual may rent each of these products please visit the link below:
Source: http://www.thedailygreen.com
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On 10.26.09, In Posts, Video of the Week, By Mario Balistreri
Popularity: 3%
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