Edward Barrera: December 2008 Archives

"I've been on the bench for 23 years, and I've never seen anything like this," said David G. Sills the presiding justice for the Fourth District Court of Appeals, Division Three."

Some say  answer: is to end prop. 13, which "was cleverly designed to make it virtually impossible for California to raise taxes...the result, of course, is that California has been deferring maintenance for a very long time. Now their judges will be working from home, their schools will fall further into decay, and their bridges will continue to crumble."

Others say, "We have reached the tipping point and fell over. This is the right time for the State to declare bankruptcy, defeat those that approve of illegal tax increases--which if enacted will bring about more unemployment--and repeal those laws that kills jobs and growth."

As the man who will be president prepares a public spending plan, locals should start drawing up their wishlists.

In the SGV, highway and rail projects have long been delayed or killed. Now is probably the best time to start begging, because who knows when this chance will pass again.

Brother, can you spare a dime on Christmas Eve: "First-time applications for state unemployment benefits jumped by 30,000 to a seasonally adjusted 586,000 in the week ending Dec. 20, the government said, based on reports of actual filings at state offices around the nation. That's the highest since November 1982."

Banks are sooo yesterday. Now  you want to saddle up to the Senate or House for that easy credit and low-interest loan.

Oh. Lordy. You mean men and women will have to look their age?

"There comes a point when you are putting too much time and money into your vanity," said Peri Basel, a practice consultant in Chappaqua, N.Y., who advises cosmetic doctors on marketing strategies. "For me, the vanity issue is: Where does it stop? If you are going for buttock implants, do you really need that?"

Or as this OC columnist says, "The gravity of the shift from youth to reality in our culture could be enormous. Women might have to look like themselves. Men, who were increasingly turning to cosmetic procedures to eradicate years, will still have Viagra but the blue pill won't erase silver threads among the gold or a deeply furrowed brow."

That would be  vehicle fees.

 According to the OCJ blog, "the concept was that the heavier the vehicle....the more wear and tear on our roads." So you can drive whatever car you want, but your fee will be connected to the type of car you drive. Why hasn't this gained traction? Apparently lobbyists and car makers. But I doubt that will stop anyone now.  

NYT: "President Bush announced $13.4 billion in emergency loans on Friday to prevent the collapse of General Motors and Chrysler, and said another $4 billion would be available for the hobbled automakers in February. The entire bailout is conditioned on the companies undertaking sweeping reorganizations to show that they can return to profitability.
-  The requirements include quickly reducing their debt, in debt for equity swaps, and basically gutting the union of wages and benefits.

Despite rival DHL leaving the country, lower gas prices and profits, FedEx has been cutting costs, and now will cut the salaries of the "CEO and other salaried personnel will receive less pay for the coming year. The chief executive's base salary will drop by 20%, the biggest cut."

More importantly we have to worry about no FedEx superbowl ad. Remember last year's? Neither do I. (Girardot probably remembers)

"...based on Sept. 30 consolidated federal statements, which showed that Americans' total household net worth, diminished by falling stock prices and home equity, is $56.5 trillion. But rising costs for unfunded social programs like Medicare, Medicaid and Social Security increased to $56.4 trillion - and that was before the more recent stock market crash, $700 billion bank bailout, and monster federal deficits chalked up in October and November."

OK. What I really wanted to say is Washington Mutual sucks, but it was a bit much in the headline.

You probably already know that banks have been cutting credit card limits for holders. Basically, one month you have a $4,000 limit, next you have a $2,000 limit.

Now, I have a WaMu card. After leaving my job a few months ago, (voluntarily. I know, good timing...anyway) I racked up credit card debt because it took me a while to find a job. So I have high debt, but I'm beginning to pay if off. Shortly before being employed, WaMu abruptly cut my limit. Now, I probably wouldn't have used it, but it was nice to know it was there just in case.

Cutting the limit isn't as bad as what it does to my credit score. My overall debt is higher now compared to my limit, which I had nothing to do with. But it's screwed up my score.

After a back and forth with WaMu on what happened, I told this (taxpayer bailed out! albeit through Chase) bank that eventually, I will get out of debt. And when I do, I'll drop its card, never use the bank again. Of course, now that it belongs to Chase, I'll have to cut that bank out as well. Geez.

In the headline for the New York Times (it's only in the print version) is this "Agency vows to print as much money as needed..." 

I'm clearly flummoxed by what the brightest financial people (who I guess got us in this mess in the first place) think will be the best way to stabilize the economy. But I keep thinking that the cure is worse than the disease.

"At some point, and without knowing the timing, the Fed is going to have to destroy all that money it is creating," said Alan Blinder, a professor of economics at Princeton and a former vice chairman of the Federal Reserve.

A woman wrote about her relationship with her boss.

She had an internship  and the man offered to become her "benefactor." The deal was he pays her rent, the bill on the limit-free credit card he and takes her on lavish vacations.

"It's a lifestyle that would be the envy of any young woman who enjoys life."

Apparently now she realizes that others don't share her attempts to ease her troubled mind in this economy.

I have to confess, I always wanted to get unemployment benefits just to see what it's like. There has always been a stigma to those on the dole, including that it breeds laziness. But that may not be the case:

"New research from Raj Chetty, a young Berkeley economist, suggests that moral hazard may not be why more generous benefits seem to lead to more unemployment. Chetty realized that unemployment benefits do not merely pay people to stay out of work; they also protect them from having to rush into an unsuitable job. It is nothing to celebrate if unemployed engineers cannot afford to spend three months finding a job for which they are qualified but are forced to work as real estate agents to put food on the table. A longer gap between jobs is sometimes preferable"

The unfolding $50 billion  scandal has stripped away the thin veneer of credibility that big-time investors had left. This scandal is amongst several that have been popping up.

And more could be on the way. The economic theory behind this, by John Kenneth Galbraith, is "inventory of undiscovered embezzlement" that flourishes when markets are good. The Madoff swindle is especially eggregioius because of the close-knit associates, friends and family involved.

This cliche works in the financial world: If it looks too good to be true, it is. These stories may just be the beginning.