Has there been significant deleveraging in the US housing market? Not really. Instead, with already $7 trillion in home equity lost, mortgages have come down only $270 billion. It’s a significant discrepancy that’s going to have to come into alignment somehow.
Jesse’s Café Américain explains:
“This debt must be resolved. There are two major ways to do it: repayment and default.
“Repayment is probably a fantasy, if not beating a dead horse. The homeowners do not have the money with which to pay the loans given the current state of employment and wage stagnation, and the mortgages are for the most part on houses whose value is significantly under water compared to the debt, as in ‘ just mail in the keys.’
“Straight up default, writing off the debt even through foreclosure, is also probably out of the question, because it would essentially vaporize the balance sheet of the US banking system which is also insolvent, to a greater degree than most understand, and if they understand it, would admit.”
This is while of “986 bank holding companies in the US, 980 [banks] lost money last year. The lucky six were the TBTF banks on major government subsidy.” To support his thinking, Jesse goes on to cite an Automatic Earth piece, Is It Time to Storm the Bastille Again:
“That is, what Americans’ homes are worth, their equity, decreased by $7 trillion — from $20 trillion to $13 trillion, from spring 2006 to spring 2010. In the same period, mortgage debt, what Americans owe on their homes, went down by only $270 billion. Yes, that’s right: US homeowners lost more, by a factor of 26, than they ‘gained’ through clearing mortgage debt. Thus, if we estimate that there are 75 million homeowners in America, they all, each and every one of them, lost $93,333.”
The government bailouts, already a failed experiment, didn’t help the vast majority of banks get profitable and also aren’t going to help homeowners pay mortgages. This debt isn’t looking to be liquidated without a prolonged period of tough times. You can read more details in Jesse’s Café Américain’s coverage of unresolved debt in the US financial system.
Thought this was particularly interesting. From David Rosenberg:
"Everyone complains about government manipulation of the data -- how "hedonics" skew the numbers (like GDP and CPI). But what about the stock market? I'm not saying it's "manipulated" but it does have substantial "survivorship bias" -- especially after a gut wrenching recession. Just cleaning the failures out of the system and erasing them from the S&P 500, from WaMu, to Wachovia, to Bear Stearns, to Lehman, to Fannie and Freddie, and replacing them with companies that survived, was responsible for nearly 40% of the rally in the market off the 2009 lows. Think about that, if those firms who went under were still in the index, according to some help from a strategy friend at an aforementioned bank, the S&P 500 would be trading closer to 900 today than 1,100."
Notable quotes for those who don't want to watch the video
Grant's thoughts on new Fed additions:
"I think the first order of business will be to try once more to print enough dollars to make something happen in the U.S. economy.”
On San Francisco Fed President Janet Yellen:
“Janet Yellen has had 36 opportunities to vote on monetary policy at the Federal Open Market Committee and she has voted ‘Aye, yes’ 36 times. 36 for 36 times. Now, has the Fed been right 36 consecutive times? No. I think that Janet Yellen is a well credentialed, consensus-hugging economist straight out of the Fed HR department. She is ideal from the point of view of the Fed bureaucracy. She will make not one ripple.”
On MIT economist Steve Diamond and Maryland state banking regulator Sarah Bloom Raskin:
“I’ve never met them but I suppose they are charming. They certainly are well credentialed. They may well have an avocation in monetary theory, but that is not their vocation. Their vocation, in the case of Professor Diamond, is fiscal policy, pensions, social security, he is an authority. He's mentor of Ben Bernanke so he’s a formidable academic.”
"Sarah Bloom Raskin is a formidable regulator. But neither is a formidable thinker about the nature of money or about the history of money or about how the Fed might paradoxically make things worse by doing what it does trying to make things better, which I think is the great question. These are people who, I think, are unlikely to oppose novel solutions to our fundamental monetary dilemma which is that the U.S. dollar is a faith-based currency of no intrinsic value that is manipulated by the Fed and the consequences of the manipulation are often quite different from what was intended. That’s the problem.”
On Fed monetary policy:
"Deflation is a funny thing. It's a word that is much in the news, much in the markets, but is all too infrequently to find. So the Fed says that deflation is broadly declining prices. But could not also be progress? In other words, if the world produces more at lower prices, is that so bad? Americans spend half of their weekends, it seems, looking for bargains.”
"So the Fed is telling us that bargains galore is something that the Fed must resist with radical volumes of credit creation… I guess what I would ask the Fed is would it please stop and help us understand why this is bad? So in 2002 and 2003, Alan Greenspan, then chairman, and Ben Bernanke, then a newly fledged governor, were out giving speeches saying that deflation is a clear and present danger, and we must - they said at the Fed - must cut rates dramatically, which they did to 1 percent."
"But the price indices today are much weaker than they were in 2003. So where is the Fed? Why not broach the topic of deflation again?"
"So what I blame the Fed for, among other things, is a lack of intellectual rigor and forthrightness."
On Federal Reserve Chairman Ben Bernanke:
"I think this is not being forthcoming with us, the people, about the nature of his concerns."
"In 2003, he was all deflation all the time. Well now the Cleveland Fed's median CPI was like 1.7 percent year-over-year, now it's 0.5 percent year-over-year. So where is the concern?"
"I think the concern will surface. We'll see more on Friday when the CPI comes out. But I think something ahead of the markets is a likelihood of the Fed stepping on the gas once more, so called quantitative easing - I think that's likely to happen…The Fed is already clearing its throat. You can see this in the newspaper leaks."
For all of its wild popularity, caffeine is one seriously misunderstood substance. It's not a simple upper, and it works differently on different people with different tolerances—even in different menstrual cycles. But you can make it work better for you. Photo by rbrwr.
We've covered all kinds of caffeine "hacks" here at Lifehacker, from taking "caffeine naps" to getting "optimally wired." And, of course, we're obsessed with the perfect cup of coffee. But when it comes to why so many of us love our coffee, tea, soda, or energy drink fixes, and what they actually do to our busy brains, we've never really dug in. While there's a whole lot one can read on caffeine, most of it falls in the realm of highly specific medical research, or often conflicting anecdotal evidence. Luckily, one intrepid reader and writer has actually done that reading, and weighed that evidence, and put together a highly readable treatise on the subject. Buzz: The Science and Lore of Alcohol and Caffeine, by Stephen R. Braun, is well worth the short 224-page read. It was released in 1997, but remains the most accessible treatise on what is and isn't understood about what caffeine and alcohol do to the brain. It's not a social history of coffee, or a lecture on the evils of mass-market soda—it's condensed but clean science.
What follows is a brief explainer on how caffeine affects productivity, drawn from Buzz and other sources noted at bottom. We also sent Braun a few of the questions that arose while reading, and he graciously agreed to answer them.
Caffeine Doesn't Actually Get You Wired
Right off the bat, it's worth stating again: the human brain, and caffeine, are nowhere near totally understood and easily explained by modern science. That said, there is a consensus on how a compound found all over nature, caffeine, affects the mind. Every moment that you're awake, the neurons in your brain are firing away. As those neurons fire, they produce adenosine as a byproduct, but adenosine is far from excrement. Your nervous system is actively monitoring adenosine levels through receptors. Normally, when adenosine levels reached a certain point in your brain and spinal cord, your body will start nudging you toward sleep, or at least taking it easy. There are actually a few different adenosine receptors throughout the body, but the one caffeine seems to interact with most directly is the A1 receptor. More on that later. Enter caffeine. It occurs in all kinds of plants, and chemical relatives of caffeine are found in your own body. But taken in substantial amounts—the semi-standard 100mg that comes from a strong eight-ounce coffee, for instance—it functions as a supremely talented adenosine impersonator. It heads right for the adenosine receptors in your system and, because of its similarities to adenosine, it's accepted by your body as the real thing and gets into the receptors. Update: Commenter dangermou5e reminds us of web comic The Oatmeal's take on adenosine and caffeine. It's concise: More important than just fitting in, though, caffeine actually binds to those receptors in efficient fashion, but doesn't activate them—they're plugged up by caffeine's unique shape and chemical makeup. With those receptors blocked, the brain's own stimulants, dopamine and glutamate, can do their work more freely—"Like taking the chaperones out of a high school dance," Braun writes in an email. In the book, he ultimately likens caffeine's powers to "putting a block of wood under one of the brain's primary brake pedals."
It's an apt metaphor, because it spells out that caffeine very clearly doesn't press the "gas" on your brain, and that it only blocks a "primary" brake. There are other compounds and receptors that have an effect on what your energy levels feel like—GABA, for example—but caffeine is a crude way of preventing your brain from bringing things to a halt. "You can," Braun writes, "get wired only to the extent that your natural excitatory neurotransmitters support it." In other words, you can't use caffeine to completely wipe out an entire week's worth of very late nights of studying, but you can use it to make yourself feel less bogged down by sleepy feelings in the morning.
These effects will vary, in length and strength of effect, from person to person, depending on genetics, other physiology factors, and tolerance. But more on that in a bit. What's important to take away is that caffeine is not as simple in effect as a direct stimulant, such as amphetamines or cocaine; its effect on your alertness is far more subtle.
It Boosts Your Speed, But Not Your Skill—Depending on Your Skill Set
Johann Sebastian Bach loved him some coffee. So did Voltaire, Balzac, and many other great minds. But the type of work they did didn't necessarily get a boost from their prodigious coffee consumption—unless their work was so second-nature to them that it felt like data entry.
The general consensus on caffeine studies shows that it can enhance work output, but mainly in certain types of work. For tired people who are doing work that's relatively straightforward, that doesn't require lots of subtle or abstract thinking, coffee has been shown to help increase output and quality. Caffeine has also been seen to improve memory creation and retention when it comes to "declarative memory," the kind students use to remember lists or answers to exam questions.
(In a semi-crazy side note we couldn't resist, researchers have implied this memory boost may be tied to caffeine's effect on adrenaline production. You have, presumably, sharper memories of terrifying or exhilarating moments in life, due in part to your body's fight-or-flight juice. Everyone has their "Where I was when I heard that X died" story, plugging in John F. Kennedy, John Lennon, or Kurt Cobain, depending on generational relatability).
Then again, one study in which subjects proofread text showed that a measurable boost was mainly seen by those who could be considered "impulsive," or willing to sacrifice accuracy and quality for speed. And the effect was only seen in morning tests, indicating the subjects may have either become lightly dependent on caffeine, or were more disposed to such tasks at that time of day.
So when it comes to caffeine's effects on your work, think speed, not power. Or consider it an unresolved question. If we're only part of the way to understanding how caffeine affects the brain, we're a long way to knowing exactly what kind of chemicals or processes are affected when, say, one writes a post about caffeine science one highly caffeinated afternoon.
For a more direct look at what happens to your brain when there's caffeine in your system, we turn to the the crew at Current. They hooked up one of their reporters to a brain monitor while taking on some new caffeine habits, and share their brains on caffeine:
Effectiveness, Tolerance, and Headaches
Why do so many patients coming out of anesthesia after major surgery feel a headache? It's because, in most cases, they're not used to going so long without coffee. The good news? If they wait a few more days, they can start saving coffee again for when they really need it.
The effectiveness of caffeine varies significantly from person to person, due to genetics and other factors in play. The average half-life of caffeine—that is, how long it takes for half of an ingested dose to wear off—is about five to six hours in a human body. Women taking oral birth control require about twice as long to process caffeine. Women between the ovulation and beginning of menstruation see a similar, if less severe, extended half-life. For regular smokers, caffeine takes half as long to process—which, in some ways, explains why smokers often drink more coffee and feel more agitated and anxious, because they're unaware of how their bodies work without cigarettes. As one starts to regularly take in caffeine, the body and mind build up a tolerance to it, so getting the same kind of boost as one's first-ever sip takes more caffeine—this, researcher can agree on. Exactly how that tolerance develops is not so clear. Many studies have suggested that, just as with any drug addiction, the brain strives to return to its normal function while under "attack" from caffeine by up-regulating, or creating more adenosine receptors. But regular caffeine use has also been shown to decrease receptors for norepinephrine, a hormone akin to adrenaline, along with serotonin, a mood enhancer. At the same time, your body can see a 65 percent increase in receptors for GABA, a compound that does many things, including regulate muscle tone and neuron firing. Some studies have also seen changes in different adenosine receptors when caffeine becomes a regular thing.
Caffeine, it's been suggested, is probably not directly responsible for all these changes. By keeping your brain from using its normal "I'm tired" sensors, though, your caffeine may be causing the brain to change the way all of its generally excitable things are regulated. Your next venti double shot goes a little less far each time, in any case. Photo by zoghal.
A 1995 study suggests that humans become tolerant to their daily dose of caffeine—whether a single soda or a serious espresso habit—somewhere between a week and 12 days. And that tolerance is pretty strong. One test of regular caffeine pill use had some participants getting an astronomical 900 milligrams per day, others placebos—found that the two groups were nearly identical in mood, energy, and alertness after 18 days. The folks taking the equivalent of nine stiff coffee pours every day weren't really feeling it anymore. They would feel it, though, when they stopped.
You start to feel caffeine withdrawal very quickly, anywhere from 12 to 24 hours after your last use. That's a big part of why that first cup or can in the morning is so important—it's staving off the early effects of withdrawal. The reasons for the withdrawal are the same as with any substance dependency: your brain was used to operating one way with caffeine, and now it's suddenly working under completely different circumstances, but all those receptor changes are still in place. Headaches are the nearly universal effect of cutting off caffeine, but depression, fatigue, lethargy, irritability, nausea, and vomiting can be part of your cut-off, too, along with more specific issues, like eye muscle spasms. Generally, though, you'll be over it in around 10 days—again, depending on your own physiology and other factors. Update: Commenter microinjectionist offers his own summary of more recent caffeine studies, which offers expanded reasons why caffeine users feel a "morning crash," as well as why your whole body, not just your brain, might feel so bad when you withdraw.
Getting Out of the Habit and Learning to Tame Caffeine
Beyond the equivalent of four cups of coffee in your system at once, caffeine isn't giving you much more boost—in fact, at around the ten-cup level, you're probably less alert than non-drinkers. So what if you want to start getting a real boost from caffeine once again, in a newly-learned, less-dependent way? Our own Jason Fitzpatrick has both intentionally "quit" caffeine, as well as just plain run out of coffee. Being the kind of guy who measures his own headaches and discomfort, he suggests measuring your caffeine intake, using caffeine amounts in all your drinks, chocolate, and other "boosting" foods. Wise Bread has a good roundup of caffeine amounts, and the Buzz Vs. The Bulge chart also shows how many calories you'll be cutting if you start scaling back. Once you know your levels, map out a multi-week process of scaling down, and stick to it. Jason also suggests that dependency kicking is a good time to start taking walks, doing breathing exercises, or other mind-clearing things, because, in his experience, their effects are much greater when caffeine is not so much a part of your make-up.
Braun, author of Buzz, sees it the same way, but still uses coffee—strategically, according to our email exchange:
In practical terms, this means that if you'd like to be able to turn to caffeine when you need it for a quick, effective jolt, it's best to let your brain "dry out" for at least several days prior to administration. This is actually my current mode of consumption. I don't regularly drink coffee anymore (gasp).
This from a man who loved (and wore out) his home espresso maker. I love coffee in all its guises. But after 30+ years it wasn't working for me. For one thing, the problem with caffeine is that there are adenosine receptors all over the body, including muscles. For me, that meant that caffeine made me vaguely stiff and sore, and it aggravated a tender lower back that was prone to spasm. But I also just wasn't getting a clean, clear buzz from coffee...I drank so much, so regularly, that drinking an extra cup or two didn't do a helluva lot except, perhaps, make me a little more irritable.
So about a year ago I slowly tapered down, and now I have, if anything, a cup of tea (half black, half peppermint) in the morning. (The amount of caffeine from the black tea isn't enough to wire a gnat.) Not only does my body feel better now, my brain is clean of caffeine, so I really want (or need) a good neural jump-start, I will freely...nay, ecstatically...indulge. Then I stop and let the brain settle again.
That's the theory, anyway...and it's basically true, although I'll freely admit that sometimes I have an espresso or coffee just because it tastes so damned good.
If you'd like Braun's extended takes on caffeine tolerance and withdrawal, along with the advent of energy drinks and caffeine's impact on creativity, you can read our full email interview.
The Wall Street Journal notes that stocks are trading in lock-step more than at any time since the 1987 crash. Please consider The Herd Instinct Takes Over. Which has some very interesting data but the conclusion is a little off......
In recent weeks, stocks in the Standard & Poor's 500-stock index have shown an increasing tendency to move in the same direction at the same time. Last week, those stocks' tendency to move in the same direction as the index hit an extreme not seen since October 1987, according to research by investment group Birinyi Associates in Westport, Conn.
The average correlation since 1980 has been 44%. But by mid-June, the correlation had jumped back above 70%, as investors stopped looking for winners and just sold broadly. Last week it surpassed its 2008 high of 79% and hit 81%, the highest level since the 1987 crash, when it touched 83% for one day. That means that on most days recently, the great majority of stocks in the S&P 500 were moving in the same direction, up or down.
Correlation typically goes up during volatile periods, reflecting investors' tendency to dump stocks wholesale rather than try to pick out stocks that once were viewed as refuges, such as those that pay dividends.
Volume has been anemic during this rise, with little individual participation. So did "herding" take over or did black-box futures and flash-trading take over? I'm thinking its the latter
This article, combined with Grantham's 1Q commentary on the Graham and Dodd Style investing has really confirmed my feelings on how this stock market has been acting and how it will continue to act in the future. Too much meddling by the government has ruined tried and true value investing.
When I read Security Analysis, the investment bible by Graham and Dodd, I am transported to a past era when investment life was easier. You could focus your energies on finding companies trading at less than fair value. You focused on the balance sheet and the income statement. The economy was static. It grew a few percent a year and economic life was rather uneventful. There were panics and crashes, but these were usually confined to certain industries like railroads where there had been overexpansion. Most companies were immune to these economic disturbances.
Graham and Dodd could look at the Dollars on the balance sheet and feel confident that they would not be marginalized by the next round of quantitative easing. They didn’t have to worry about the fiscal sanity of their government. It was just taken for granted that the US government finances were solvent. Governments always enacted arbitrary laws, but no one had to worry about wholesale regulatory change every time congress was in session. Regulatory regimes changed gradually—if at all. Liabilities were what showed up on your balance sheet. An investor did not have to worry about wolf-packs of ambitious lawyers descending on every company in crisis and exacting an extra pound of flesh. Tax rates were constant enough to allow for long term economic planning.
Prudent investors demanded a margin of safety before investing in a company. That margin of safety protected you from all of the above and still left plenty of room for upside. That is because most of the risks to a corporation were quantifiable. This let investors focus on their companies and ignore the newspapers. The macro world was largely irrelevant. You bought great companies at reasonable prices and waited until the share prices appreciated. World events simply didn’t matter. The business cycle only barely mattered. Buy cheap and let compounding work in your favor.
Now, investing seems to revolve around just one factor. What will the government do next? Which businesses will they clamp down on? Which will be subsidized? Who will get the next bailout? Will various tax subsidies be increased or eliminated? What new laws are in the mix? How can you anticipate all these changes?
There are no constants any longer. You cannot rely on anything. Everything seems perpetually in flux. The world economy is once again imploding. Will it be allowed to collapse? Unlikely. When will the next bailout be announced? What shape will it take? Who will the winners be? That really is the question that everyone demands an answer to. When is the next bailout? Bigger, Badder, More Corrupt—that’s our country’s new mantra. Which companies will lobby the right congressmen and be included? Which will be destroyed?
How do you invest in an environment like this? Say you look at a company. Do you want a business that’s economically sensitive—or one that has a strong and liquid balance sheet? Are you betting on them printing just a little money—or a full out Weimar style debasement? What’s the expected tax rate? It’s going up. That’s for sure. Will carbon taxes impact my businesses? What about changes in health care legislation? There are dozens of issues currently debated in congress. They all impact businesses.
Then there’s the whole wide world outside of the US. A generation ago, most businesses were regional. You could ignore what happened in China. Now China is the lynchpin of global economic growth. How can you decipher China? It’s monolithic. Will the Euro survive? Will it be debased or discarded as the component nations go their own separate way? Imagine the world’s largest economic bloc simply repudiating their currency? How do you invest for that? The whole investment climate is a daisy-chain of binary outcomes that are mutually exclusive. The middle ground seems vanquished.
These are the issues that I tango with daily. I invest in small businesses. Over the past decade, I’ve made a lot of money doing this. However, it continues to become more difficult. The rules change every day. A decade ago, I mostly ignored the macro—now I spend most of my time analyzing it. Small companies are illiquid and volatile. That has never bothered me before. Now I increasingly want more liquidity. I want the ability to react to the newest crisis. I am not a trader—now I have no choice. Every morning, I have to throw out all the old rules and start again. The macro events rule—businessmen are impotent.
I want to buy great businesses and put them away for years at a time. No longer can you trust that a dominant business will remain dominant. It won’t be a competitor that destroys the business. It will be an errant politician or a bad hedge on their Euro exposure. Volatility is destroying real businesses. Is every company now expected to hire whole trading desks to manage various exposures? How can you expect the most basic elements of a business to remain stable when the currency itself is increasingly detached from reality?
I have no problem navigating economic booms and collapses. That’s part of investing. What I strongly object to is the government increasingly inserting itself into the economy. You cannot manage an economy based on the applause meter of 24-hour news programs. You cannot manage an economy. Period. It is not debatable. Unfortunately, our government continues to corral the various market forces and lead them towards whatever myopic utopia politicians think will be needed for reelection. This creates economic anarchy. If you could run an economy based on erratic rules and crony capitalism, Argentina would be a world power. If you could print your way to prosperity, Zimbabwe would be a world banking hub. If you could command the economy to heed you, the USSR would still exist. I’m scared that world leaders have taken all the worst lessons of the last generation of economic thought and bundled them together into some sort of economic doomsday machine.
I apologize for this stream of consciousness. I’m frustrated. For my whole career, I believed that a great business with a strong return on capital would outperform all other asset classes. What if that isn’t true? For the past three years, only the macro has mattered. Going forward, what if the macro is ALL that matters? What if you have to rapidly jump from asset class to asset class as the rules change weekly? I hope this isn’t the case. However, it is time to consider that possibility.
In an age of increasing uncertainty, market multiples will collapse. Investors will demand an even larger margin of safety. Earnings will become increasingly volatile. Investors will focus more and more on the balance sheet. Unfortunately, most companies trade at many times book value. Some of the largest companies in the US have negative tangible book value. I expect to see market multiples continue to decline. Why would you risk your capital in uncertain times when you can just buy gold and ignore all the chaos around us? That’s really what I wrestle with the most. Gold will continue to go higher over time—if only because world governments seem determined to act foolish. Can you find companies that will outpace the price increase of gold? It will be difficult. The macro forces arrayed against business are just that extreme. You can no longer ignore the macro. The macro outweighs all else now.
#40) According to a Pew Research Center study, approximately 37% of all Americans between the ages of 18 and 29 have either been unemployed or underemployed at some point during the recession.
#39) More than 40% of those employed in the United States are now working in low-wage service jobs.
#34) According to RealtyTrac, foreclosure filings were reported on 367,056 properties in March 2010, an increase of nearly 19 percent from February, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.
#33) In Pinellas and Pasco counties, which include St. Petersburg, Florida and the suburbs to the north, there are 34,000 open foreclosure cases. Ten years ago, there were only about 4,000.
#31) The Mortgage Bankers Association recently announced that more than 10 percent of all U.S. homeowners with a mortgage had missed at least one payment during the January to March time period. That was a record high and up from 9.1 percent a year ago.
#27) U.S. commercial property values are down approximately 40 percent since 2007 and currently 18 percent of all office space in the United States is sitting vacant.
#26) Defaults on apartment building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter of 2010. That was almost twice the level of a year earlier.
#25) In 2009, U.S. banks posted their sharpest decline in private lending since 1942.
#23) To make up for a projected 2010 budget shortfall of $280 million, Detroit issued $250 million of 20-year municipal notes in March. The bond issuance followed on the heels of a warning from Detroit officials that if its financial state didn’t improve, it could be forced to declare bankruptcy.
#16) U.S. government-provided benefits (including Social Security, unemployment insurance, food stamps and other programs) rose to a record high during the first three months of 2010.
#15) 39.68 million Americans are now on food stamps, which represents a new all-time record. But things look like they are going to get even worse. The U.S. Department of Agriculture is forecasting that enrollment in the food stamp program will exceed 43 million Americans in 2011.
#13) U.S. law enforcement authorities claim that there are now over 1 million members of criminal gangs inside the country. These 1 million gang members are responsible for up to 80% of the crimes committed in the United States each year.
#12) The U.S. health care system was already facing a shortage of approximately 150,000 doctors in the next decade or so, but thanks to the health care “reform” bill passed by Congress, that number could swell by several hundred thousand more.
#10) The Dow Jones Industrial Average just experienced the worst May it has seen since 1940.
#9) In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
#7) According to economists Thomas Piketty and Emmanuel Saez, two-thirds of income increases in the U.S. between 2002 and 2007 went to the wealthiest 1% of all Americans.
#6) The bottom 40 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
#5) If you only make the minimum payment each and every time, a $6,000 credit card bill can end up costing you over $30,000 (depending on the interest rate).
#4) According to a new report based on U.S. Census Bureau data, only 26 percent of American teens between the ages of 16 and 19 had jobs in late 2009 which represents a record low since statistics began to be kept back in 1948.
#3) According to a National Foundation for Credit Counseling survey, only 58% of those in “Generation Y” pay their monthly bills on time.
#2) During the first quarter of 2010, the total number of loans that are at least three months past due in the United States increased for the 16th consecutive quarter.
#1) According to the Tax Foundation’s Microsimulation Model, to erase the 2010 U.S. budget deficit, the U.S. Congress would have to multiply each tax rate by 2.4. Thus, the 10 percent rate would be 24 percent, the 15 percent rate would be 36 percent, and the 35 percent rate would have to be 85 percent.
Any health care funding plan that is just equitable civilized and humane must, must redistribute wealth from the richer among us to the poorer and the less fortunate. Excellent health care is by definition re-distributional.
Donald Berwick in 2008 while speaking on the British health care system in the UK
There was also this nugget during his speech
Please don’t put your faith in market forces. It is a popular idea that Adam Smith’s invisible hand will do a better job at designing care than leaders with plans can do. I do not agree. I find little evidence anywhere that market forces bluntly used that is just consumer choice among a ray of products with competitors fighting it out, leads to the health care system you want and need.
President Barack Obamabypassed the Senate Wednesday and appointed Dr. Donald Berwick, a Harvard professor and patient care specialist, to run Medicare and Medicaid. The decision to use a so-called recess appointment to install Berwick as administrator of the Centers for Medicare and Medicaid Services drew immediate fire from the GOP .
There are certain times when things go awry and I support solutions using any means necessary, then again there are times where I do not. This article really shows how this Gulf Mess is a situation deserving of the former.
Some are attuned to the possibility of looming catastrophe and know how to head it off. Others are unprepared for risk and even unable to get their priorities straight when risk turns to reality.
The Dutch fall into the first group. Three days after the BP oil spill in the Gulf of Mexico began on April 20, the Netherlands offered the U.S. government ships equipped to handle a major spill, one much larger than the BP spill that then appeared to be underway. "Our system can handle 400 cubic metres per hour," Weird Koops, the chairman of Spill Response Group Holland, told Radio Netherlands Worldwide, giving each Dutch ship more cleanup capacity than all the ships that the U.S. was then employing in the Gulf to combat the spill.
To protect against the possibility that its equipment wouldn't capture all the oil gushing from the bottom of the Gulf of Mexico, the Dutch also offered to prepare for the U.S. a contingency plan to protect Louisiana's marshlands with sand barriers. One Dutch research institute specializing in deltas, coastal areas and rivers, in fact, developed a strategy to begin building 60-mile-long sand dikes within three weeks.
Now let me deliver this bit of rhetoric, do you think the US would accept this generous help?
In sharp contrast to Dutch preparedness before the fact and the Dutch instinct to dive into action once an emergency becomes apparent, witness the American reaction to the Dutch offer of help. The U.S. government responded with "Thanks but no thanks," remarked Visser, despite BP's desire to bring in the Dutch equipment and despite the no-lose nature of the Dutch offer --the Dutch government offered the use of its equipment at no charge. Even after the U.S. refused, the Dutch kept their vessels on standby, hoping the Americans would come round. By May 5, the U.S. had not come round. To the contrary, the U.S. had also turned down offers of help from 12 other governments, most of them with superior expertise and equipment --unlike the U.S., Europe has robust fleets of Oil Spill Response Vessels that sail circles around their make-shift U.S. counterparts.
Why does neither the U.S. government nor U.S. energy companies have on hand the cleanup technology available in Europe? Ironically, the superior European technology runs afoul of U.S. environmental rules. The voracious Dutch vessels, for example, continuously suck up vast quantities of oily water, extract most of the oil and then spit overboard vast quantities of nearly oil-free water. Nearly oil-free isn't good enough for the U.S. regulators, who have a standard of 15 parts per million -- if water isn't at least 99.9985% pure, it may not be returned to the Gulf of Mexico.
So we use horrifically inefficient means to combat a problem that is worsening daily when there is a solution that results in less than 10% of the oil getting into the water that we ignore.
The Americans, overwhelmed by the catastrophic consequences of the BP spill, finally relented and took the Dutch up on their offer -- but only partly. Because the U.S. didn't want Dutch ships working the Gulf, the U.S. airlifted the Dutch equipment to the Gulf and then retrofitted it to U.S. vessels. And rather than have experienced Dutch crews immediately operate the oil-skimming equipment, to appease labour unions the U.S. postponed the clean-up operation to allow U.S. crews to be trained.
Oh fantastic! (Insert large numbers of expletives here)
A catastrophe that could have been averted is now playing out. With oil increasingly reaching the Gulf coast, the emergency construction of sand berns to minimize the damage is imperative. Again, the U.S. government priority is on U.S. jobs, with the Dutch asked to train American workers rather than to build the berns. According to Floris Van Hovell, a spokesman for the Dutch embassy in Washington, Dutch dredging ships could complete the berms in Louisiana twice as fast as the U.S. companies awarded the work. "Given the fact that there is so much oil on a daily basis coming in, you do not have that much time to protect the marshlands," he says, perplexed that the U.S. government could be so focussed on side issues with the entire Gulf Coast hanging in the balance.
And the icing on the cake.....
Then again, perhaps he should not be all that perplexed at the American tolerance for turning an accident into a catastrophe. When the Exxon Valdez oil tanker accident occurred off the coast of Alaska in 1989, a Dutch team with clean-up equipment flew in to Anchorage airport to offer their help. To their amazement, they were rebuffed and told to go home with their equipment. The Exxon Valdez became the biggest oil spill disaster in U.S. history--until the BP Gulf spill.
For all of its wild popularity, caffeine is one seriously misunderstood substance. It's not a simple upper, and it works differently on different people with different tolerances—even in different menstrual cycles. But you can make it work better for you.
While there's a whole lot one can read on caffeine, most of it falls in the realm of highly specific medical research, or often conflicting anecdotal evidence. Luckily, one intrepid reader and writer has actually done that reading, and weighed that evidence, and put together a highly readable treatise on the subject. 
Every moment that you're awake, the neurons in your brain are firing away. As those neurons fire, they produce 
Enter 
More important than just fitting in, though, caffeine actually binds to those receptors in efficient fashion, but doesn't activate them—they're plugged up by caffeine's unique shape and chemical makeup. With those receptors blocked, the brain's own stimulants, 
Johann Sebastian Bach loved him some coffee. So did Voltaire, Balzac, and many other great minds. But the type of work they did didn't necessarily get a boost from their prodigious coffee consumption—unless their work was so second-nature to them that it felt like data entry.
As one starts to regularly take in caffeine, the body and mind build up a tolerance to it, so getting the same kind of boost as one's first-ever sip takes more caffeine—this, researcher can agree on. Exactly how that tolerance develops is not so clear. Many studies have suggested that, just as with any drug addiction, the brain strives to return to its normal function while under "attack" from caffeine by up-regulating, or creating more adenosine receptors. But regular caffeine use has also been shown to decrease receptors for 
Our own Jason Fitzpatrick has both intentionally "quit" caffeine, as well as just plain run out of coffee. Being the kind of guy who measures his own headaches and discomfort, he suggests measuring your caffeine intake, using caffeine amounts in all your drinks, chocolate, and other "boosting" foods. 
