Welcome to my weekly recap of articles I’ve read on topics of finance, markets, and investing. All are on open questions I’m interested in.
Skip the weirdly puritanical sex-talk anecdote, read on for the Pontificator-in-Chief’s zero bound observations LINK
When will investors know if current global monetary policies will succeed?
Almost all assets are a bet on growth and inflation (hopefully real growth) but in its absence at least nominal growth with some inflation. The reason nominal growth is critical is that it allows a country, company or individual to service their debts with increasing income, allocating a portion to interest expense and another portion to theoretical or practical principal repayment via a sinking fund. Without the latter, a credit-based economy ultimately devolves into Ponzi finance, and at some point implodes. Watch nominal GDP growth. In the U.S. 4-% is necessary, in Euroland 3-4%, in Japan 2-3%.
Zillow assesses the value of coastal real estate at the turn of the next century LINK
Gawker’s final installment of Unemployment Stories LINK
Inside the bubble
I’ve hesitated to write you, because, well, I’m not unemployed. I have a job that pays relatively well, as does my wife. We’re living in the very heart of the American Empire, where the housing crisis apparently never happened (go 5-10 miles into the burbs and it sure did, but not here, not here), where cheaply-built faux rowhouses go up on the site of a train switching yard (right beside a rail line and underneath the flightpath for Congress’ favorite airport) for absolutely jaw-dropping sums of money. It’s like a dream world here – even the momentary panic about the sequester has given way to a sublime, unstated confidence that the future will be just like today, only better. Everything will work itself out. It always does.
We’ve been looking hard for jobs, though, outside of the capital of the Empire, for personal reasons. I’ve been looking for nearly two years now, and it’s really rough out there, even for someone who already has a job. I can’t tell you how different the job searching universe is from where it was before the beginning of the Depression of 2008 (let’s be honest with ourselves – that’s what it is). I’ve sent out countless resumes – first for just federal jobs, and then for the past few months for anything, public or private. And I’ve gotten interviews. But the interviews have been surreal. I’ve had two interviews in which I was informed that the duties of the position were substantially different from what was listed in the application. Interviewers have gotten aggressive and confrontational with their questions, to a degree that they never had before. It’s almost as if, somehow, they’re taking this new world as an opportunity to show the job seekers who’s boss, to make sure they know their place, rub their noses in it a little, rather than just, you know, find a good candidate to fill a position. Even federal interviews are tacking on new requirements – extra essay questions after the interview, for example – that I’m not 100% sure are even legal.
I can tell you that I have never heard anyone inside the bubble I’m living in – not once – express any concern over longer-term unemployment, and I have a lot of friends here. The attitude increasingly is “well, I’ve got a job, and there are so many jobs around this town, so if someone can’t get a job in Kansas City or Dallas or Phoenix or Buffalo, they must be doing something wrong”. No one cares. So if you are holding out some hope that your government is about to come and save you, think again. It’s not that one party is being held back from doing the right thing for you by the evil other party – nobody here cares on either side. It’s not even on the radar. Not in the free political papers by the light rail stop, not in conversations, not on blogs, not anywhere. They don’t care about you. Burn those words into your memory…
I came from a working-class background, and I got to where I am by pretty much banging my head against door after door until something gave. Persistence, persistence, persistence. That’s the American dream, right? Anybody can make it if it they just put their shoulder to the grindstone. You don’t have to know the right person, kiss the right ass, or grease the right palm. Sure, it was never close to perfect, but it used to be better than it is today, and not very long ago, either. Now it’s increasingly all about “networking”, which is a euphamism for connections, guanxi, nepotism. It was always thus at the higher, WASP-y echelons of the aristocracy, but now? It’s trickling ever-further down. There’s a whiff of the stereotypical banana republic about it that wasn’t nearly that strong before 2008. Secret handshakes. I wonder how long it’ll be before it’s part of everyday life to slip local officials petty bribes as a precondition to get anything done. I have a bad feeling it won’t be very long.
God bless Occupy, because they saw what was happening, and by merely sticking their heads up, they stood up against the most pernicious lie, the most damnable (literally, I sometimes think) lie of them all – “blame the victim – it’s all your fault”. I’ve hated that lie all my life, and yet I can’t escape it, even inside my own mind. Something’s changed out here, something huge, like a shifting of tectonic plates. This isn’t like any of the other recessions in my lifetime. This is different somehow, and we – well, everyone but the 0.1 percent – are all in it together, whether or not we think we are. Everyone’s vulnerable. If you don’t think you are, you’re wrong.