Monday, October 27. 2008
I've been hearing a lot of rhetoric in the news about how bad the current financial crisis is. A common phrase being thrown around is that this is a once in a century event. The New York Times has a very informative chart which illustrates how bad the stock markets are going, and how they compare to other bear markets.
I remember a couple months back, I was pondering if I was being bearish and pessimistic enough. Basically I wasn't. The scary thing is, it appears I'm still not bearish enough when you look at the chart. We've lost 50% of the stock market so far; however, during The Great Depression, the stock market lost 80% of its value.
Of course, there is a silver lining in all of this. A market crash is actually a boon if you're investing for retirement, ie you need your money in 40+ years. In the long-run, this is the ultimate play on "buy low, sell high" if your time horizons are long enough. That is why, I'm still doing some buying for my retirement fund.
Wednesday, October 22. 2008
Looks like last weekend, both Senator McCain and Senator Obama were at the Alfred E Smith Memorial Dinner, and they took turns roasting each other. There's some pretty good material there. Myron, your best friend Keith Olbermann is mocked as well.
Enjoy!
Does anyone think that McCain looks like Saul Tigh in this video? Go Tigh / Roslin 2008!
Thursday, October 16. 2008
I've been watching some of The Daily Show's coverage of the McCain campaign, and some of the people who attend those rallies are just amazing. Observe.
The level of ignorance displayed by the lady at the end is truly jaw dropping.
Wednesday, October 15. 2008
I just got this bit of local news from my Senior Correspondent in the Victoria Bureau, Myron. The headline is " Homeless Allowed To Pitch Tents In Parks," in Victoria.
The city's homeless can now camp in Victoria parks, according to a B.C. Supreme Court decision Tuesday.
"Yesterday it was illegal to set up my tent. Today it isn't," said David Johnston, one of the homeless activists who argued they have a right to sleep outdoors on public property.
Lawyer Catherine Boies Parker, who acted on behalf of the homeless campers in their court challenge of the city's anti-camping bylaw, confirmed the 108-page judgment upheld their argument that a City of Victoria bylaw that prohibits using "temporary abodes" like tents and large tarpaulins for shelter in parks and public spaces violates the rights of the homeless.
She said the judgment noted that in the absence of sufficient safe and secure beds for the homeless, it was unconstitutional for the city to prevent them from erecting some form of shelter to protect themselves from the elements.
The decision came three years after a group was arrested in October 2005 for setting up a "tent city" in a Victoria park. The eviction sparked the court challenge.
"We don't have to search every morning and night for a place to sleep," Johnston said.
He predicted that tent cities will spring up in other municipalities once the decision becomes widely known.
Such encampments "might be the thing which saves us from the economic crush," he said.
At a city hall news conference, Mayor Alan Lowe predicted the impact of the decision will be felt throughout Canada.
"This judgment demonstrates what years of cuts to social programming and housing programs has done. Municipal governments were never in the business of providing housing and social support services to individuals in need," Lowe said, calling on higher levels of government to respond to the court decision.
The judgment does not bode well for city parks, Lowe warned. "Our city parks are not equipped to support camping of any kind.
"We've seen first hand the ill effects of tent cities. In 2005 . . . we saw a tent city that had become a hub of illegal activity, health concerns and vandalism," he said.
Continue reading "Homeless Can Legally Setup Camps In Parks"
Friday, October 10. 2008
With a full blown financial armageddon upon us, I pondered to myself, what stocks could possiblely be up after massive drops everyday? It turns out there are stocks that actually move up. Observe the UltraShort S&P500 ProShares (SDS)
This is a fund that makes money whenever the markets go down. This is known as shorting which is where you're betting that the market is going down. If you read the chart, this fund has been doing extremely well this month. Today it was up more than 10%. Looks like the bears are winning big time.
Note: I am not advocating shorting the market or investing in the UltraShort fund. I'm merely highlighting that whether the market is up or down, someone is making money in the market.
Thursday, October 9. 2008
I got this article from Myron entitled, " The party's over for Iceland, the island that tried to buy the world." I was kind of shocked by this article because it was completely off my radar and it's not being covered by any of the mainstream media down here.
Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country's three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won't send any more money and supplies of foreign currency are running out.
People talk about whether a new emergency unity government is needed and if the EU would fast-track the country to membership. On Friday the queues at the banks were huge, as people moved savings into the most secure accounts. Yesterday people were buying up supplies of olive oil and pasta after a supermarket spokesman announced on Friday night that they had no means of paying the foreign currency advances needed to import more foodstuffs.
This North Atlantic volcanic island, which is the size of Cuba, with a population of 320,000 - the size of Coventry's - is an unlikely player on the global financial stage. It is famous for its fish, geysers and for winning the UN's 2007 'best country to live in' poll. But Iceland built its extraordinary wealth on the crest of the worldwide credit boom and now the crunch is sweeping it away, bankrupting a people for whom the past eight years have been, for most of them and by their own admission, one long party.
The nation's celebrated rags-to-riches story began in the Nineties when free market reforms, fish quota cash and a stock market based on stable pension funds allowed Icelandic entrepreneurs to go out and sweep up international credit. Britain and Denmark were favourite shopping haunts, and in 2004 alone Icelanders spent £894m on shares in British companies. In just five years, the average Icelandic family saw its wealth increase by 45 per cent. [...]
Outside the city's Hofdahollin car showroom, looking a little rumpled for men trying to sell new and used cars for £35,000 and up, owner Runar Olafsson and his top salesman are sharing a Marlboro. They are not expecting any customers today. 'A few years ago we couldn't get enough top-end cars and we started importing them. We were selling 120, 140, a month. But it turned around so fast,' says Olafsson. 'It's so dramatic, just in one month. We have already seen two dealers go down.
'Customers would come in and we would apply for credit online for them, a 100 per cent loan, and they can drive away in their new Range Rover. It took ten minutes, it was very easy. But 60 to 70 per cent of those loans were in foreign currency, Japanese yen or Swiss francs, and they have gone up 90 per cent as the krona burns. A car worth 5 million krona now has a 9 million loan on it; how are people going to make those payments?'
I think it's quite remarkable how quickly this credit crisis has spread all around the world. The shockwaves are being felt everywhere. If you need proof, anyone see the Toronto Stock Exchange plunging 11% on Monday? In either case, I don't even bother looking at my RRSP/stock account balance anymore, it's too scary.
Bjork! Save your country!
Monday, October 6. 2008
This weekend, I was going through PBS' video collection because I had run out of things to watch, and I came across a very eye opening documentary from Frontline entitled, " Sick Around The World." It's a 60 minute documentary that you can watch online for free. The premise is that the US still does not have universal health care, so the host takes a look at five other democratic capitalist countries to see what their health care systems are like, and what we can learn from those systems. The countries highlighted are the United Kingdom, Japan, Germany, Taiwan, and Switzerland.
Here's a snippet of what you will see in the documentary:
Reid reports next from Japan, which boasts the second largest economy and the best health statistics in the world. The Japanese go to the doctor three times as often as Americans, have more than twice as many MRI scans, use more drugs, and spend more days in the hospital. Yet Japan spends about half as much on health care per capita as the United States.
One secret to Japan's success? By law, everyone must buy health insurance -- either through an employer or a community plan -- and, unlike in the U.S., insurers cannot turn down a patient for a pre-existing illness, nor are they allowed to make a profit.
It's quite remarkable that in the US, about 700,000 people a year declare bankruptcy because of a medical emergency. This happens when someone falls ill and doesn't have the money/insurance to cover the costs. The host of the show asks health officials from each country, how many people a year go bankrupt because of medical bills? All of the officials look very puzzled when presented with the question, and they all answer, no one in our country goes bankrupt over medical bills.
As I worked my way through the documentary, I had a few conclusions:
- A pure public health care system does not work because there's no competition in the system, so cost overruns, poor service, and long wait lists are problems.
- A pure private health care system like the US just doesn't seem ethical because the poor don't have access to proper health care. It's also scary that if you lose your job, you'll usually lose your health insurance as well, and that's quite a gamble. It seems morally unethical that people can go bankrupt because of poor health.
- What seems to work is a hybrid system where there's universal health care, but you introduce the good parts of a private health care system, which is competition/market forces. For example, hospitals who don't control costs, or provide poor service will ultimately be replaced with better more efficient hospitals which are competing for patients.
- Information Technology seems plays a big role in keeping costs down. For example, in Taiwan, when a patient pays medical premiums, only a few percent of that goes towards administrative costs. Contrast that with the US where about 15-18% of premiums goes towards administrative costs.
- Countries are able to get drugs at a much lower price if they the country negotiates on behalf of all patients with drug companies. This allows the country to say, for this drug, we're willing to pay $x for this. This is using the country's buying power to the advantage of the the public, and thus reducing costs.
I find myself quite appalled by the American system, as I see how much money my company pays each year for my medical insurance, and it's orders of magnitude more than the premiums I paid in Canada. I feel like the company is getting ripped off by such high premiums, but I've been told these types of premiums are normal in the US. It's also quite scary that most people depend on their jobs for medical insurance, and if they lose their jobs, they lose their insurance.
Continue reading "Frontline: Sick Around The World"
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