Economic Hitmen

So, I am finally reading Confessions of an Economic Hitman.

I am curious to hear what others think about the concept.

• Is it a work of fiction, with just enough history and research built in to carry it along?
• Is it all true and I should believe all the conspiracy theories?  Build my own tin foil hat?
• Is it like the question about the Tootsie Roll center of a Tootsie Pop: The world may never know?

An Economic Concern

I am not an economist, so I could be totally wrong about this.  Take it with a grain of salt.  Also this is, as typical, one of my fermenting thoughts, so it may not be described clearly enough to make any sense to anyone beyond myself.  If that is the case, please let me know and I will keep working on it.

It seems to me that the stock market is one of the most critical components of our economy.  I know that I am not the only one who does not expect Social Security to be around when we get old -- the system is already broken.  But that is why we invest in the market, we can cash out when we get old and need the money.

But what if that doesn't quite work out?

Just like the baby boom bubble is going to overwhelm Social Security, what if it overwhelms the stock market?  As the boomers retire they want to continue their current lifestyle: "The American way of life can not be compromised."  To do this they are going to have to turn to the stock market and sell off their holdings.  This makes sense and it follows the expected pattern.  Except the boomers never expected to see oil at $130 a barrel, and their plans never began to account for life at $300 a barrel (think $10/gallon gasoline -- which admittedly is painful to think about). 

So what do they do?  I suspect they spend down their investments at a quicker rate.  Sure that means less left in the will for the kids and the charities, but this is their money and they have earned the right to continue their lifestyle.

But who is going to buy what their selling?  There are more boomers selling off their stocks than there are those in employment earning money to buy stocks.  Supply and Demand would suggest that this would push prices down.  Now factor in that those currently in employment are also facing higher prices on everything.  Are they going to put the money towards their retirement or towards the gas tank?  I suspect the latter.  So now you have lots of people desperate to sell off their stocks, and less people (with increasingly tighter budgets) to buy those shares.  Supply and Demand again pushes prices down.

If this pushes stock prices down too much, then it could create a cycle.  The boomers need to then sell yet more of their holdings just to keep up, flooding Wall Street with what used to be bits of paper (not just ones and zeros).

Not a pretty sight.

It would be great to hear that my thought process is misguided, that there is a basic (or even not-so-basic) understanding of economics that I just don't know which makes this discussion moot.

-- Andy

Cacophony

I recently got a Sansa clip mp3 player (cheaper than an ipod, and none of that annoying software to install).  I have been using it as I try to encourage myself to walk home from work more often.

What I have noticed is just how noisy the city can become.  There is still way too much traffic in the city (implying, to me at least, that gas hasn't gotten quite expensive enough yet).  For the most part, the sounds from a vehicle seem to be proportionate to its size -- the large car is worst than the small car, but the big truck is worst of all.  And yes there are occasionally those who have the volume of their music device turned up as if I wanted to hear what they were playing (I do not).

But there is one offender that breaks this concept of proportionality -- the motorcycle.  I just don't comprehend why they are so loud.  The rider is closer to the engine, so one would have to imagine the rider would want a quieter engine.  I would guess that the engine is smaller, which should mean there is less engine to make noise.  I am sure there is some percentage of motorcycle owners with horrible psychological issues who need to feel important by catching our attention with a noisy motorcycle, maybe to make up for other shortcomings in their life.  And I am sure there are others who are just inconsiderate jerks like those that play the music in their vehicles too loudly.  But that really can't explain all motorcycle owners, can it?

I really am just missing something here.

-- Andy

Belle and Sebastian (and a Blue Moon)

[Yes, yes, I apologize that it has been ages since I last posted.  Of course if you keep up with me via RSS then it is easy to follow along -- no need to keep checking the site.  There are a few more posts waiting  -- I just need to get them out of my head and onto Live Writer]

Last Thursday/Friday I took two days off work to go out to Shenandoah National Park.  I hiked around during the day but spent the night in one of the nearby towns.

Well, rather than be smart about it and seek out a local restaurant, I ended up at one of those Thank Ruby it's a Chili Outback-type places.  But it did lead to an interesting observation, or two.

The music set they were playing included a song by Belle and Sebastian.  I found that cool (although my sister might not have -- we don't always share the same tastes in music).  The song was White Collar Boy.  I had to remind myself to check when I got home -- I was hoping for the sake of comedy that this would be off the album Dear Catastrophe Waitress.  Alas, it was not.  Still, it was not the type of song I expected from such a place.

The other interesting part was when I asked what beers they had.  The waitress went through a list of the regular things that I would avoid, and then ended with "and Blue Moon."  The problem with that is Blue Moon is a brewery, not a specific beer type.  Almost like trying to sell someone a car and just telling them it's a Ford or Toyota.

In case you are wondering, it was their Belgian White, which is by far the most common Blue Moon beer, so I should have guessed it.  Don't let the name of the beer fool you it was probably the darkest color beer they offered.  And yes, I foolishly forgot to ask them to serve it in a room temperature glass, so I ended up with their ice frosted glass -- ugh.