Debt and Futures

A couple of guys just won the Nobel for Economics. We still have very high unemployment and these guys don't have a clue how to create jobs. One of them said he would sit on his money for a while. Sitting on money will not create a single job. Spending it will. The problem is two-fold: too much debt and the futures market. Futures are like the gambling aspect of the economy, really meant only for speculators, which means it creates nothing - no products, no services. When losses occur, someone is left holding the bag which then means a debt that goes unpaid and is written off. That takes money out of the economy without giving anything back in return. I'm only guessing, of course. Have a nice day.

Five seconds of carelessness

It didn't have to end this way: From a story in The New York Times: “Adolph Merckle’s creditors were responsible for his death, even if they were not present by the tracks on that snowy night that he jumped in front of the train”, said a town resident. His employees and residents of his hometown saw Mr. Merckle as a decent, taciturn man who looked after his workers and his community, despite his wealth. He was No. 94 on Forbes magazine’s most recent ranking of the 400 richest people in the world. His four children grew up in a modest one-family house with the Merckle name on the mailbox. “I look at this as the banks’ taking the heart out of the family,” said a member of the Blaubeuren City Council. Mr. Merckle’s suicide shocked Germany as much as it angered Blaubeuren, where he was eulogized Monday at a memorial service that overflowed the hamlet’s church.” Merckle had recently lost 400 million Euros in a bad bet against the share price of VW. He was deep in debt with no way to pay it down quickly or restructure it. His flagship company was about to be sold. He had simply been caught in the vise of the worldwide economic downturn – completely unprepared. But, he had also borrowed way too much in order to acquire new businesses. One of my favorite teachers once told me, “be careful that you never bite off more than you can chew.” GOOD ADVICE.

Sell fast

If you live in one of these zip codes and are planning to sell your house, you're lucky. According to Business Week magazine, these are the fastest selling zip codes in the country - houses are averaging about 70 days on the market (compared to six months elsewhere): 94087 and 92131 (in California); 78749, 75075, and 77094 (in Texas); 97202 (in Oregon), 01880 (in Massachussetts); 98117 (in Washington); 80130 (in Colorado); and 30340 (in Georgia). According to Smart Money, the hardest hit states when the housing bubble burst were Nevada, Florida, California, and Arizona.