Pension fund running-out-of-money story - there's gonna' be a lot more of these
Posted On: Wednesday - March 1st 2017 8:39AM MST
In Topics: Global Financial Stupidity
After the long series of introductory posts on the Global Financial Stupidity situation, we can now just, more sporadically, have some posts with examples. Zerohedge would be the "go-to" site on this, and here is another in many posts about the impossibility of pension funds to deliver on their promises, as delved into here, more specifically on PeakStupidity. Zerohedge describes NY Teamsters Pension Becomes First To Run Out Of Money As Expert Warns "Pension Tsunami" Is Coming.
This ZH post is a series of a four or five different stories of a few different pension funds of the trucking industries. These trucking guys are usually guys that you don't want to fuck with, but I guess, by definition they will be too old to fight things with tire irons around the time they begin to need this promised money. The post is a kind of meat-and-potatoes post of Zerohedge, or their forte (if you eat French cuisine instead of meat and potatoes). It's real world, good stuff to read and to me what the ZeroHedge site is all about. The commenters most likely have good stuff to add. I can't put the whole thing here - people don't like that, and one can read it there.
The New York Teamsters Road Carriers Local 707 Pension Fund has won the unfortunate award for "First Pension to Officially Run Out of Money." According to the New York Daily News, and a host of angry former truck drivers who've had their pension benefits slashed, the Pension Benefit Guaranty Corp. (PBGC) has officially been forced to step in and take over payments to retirees of the Local 707, albeit at a much lower rate.
Teamsters Local 707’s pension fund is the first to officially bottom out financially — which happened this month.
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“I had a union job for 30 years,” Chmil said. “We had collectively bargained contracts that promised us a pension. I paid into it with every paycheck. Everyone told us, ‘Don’t worry, you have a union job, your pension is guaranteed.’ Well, so much for that.”
“It’s a nightmare, it has just devastated all of our lives. I’ve gone from having $48,000 a year to less than half that,” said Chmil, one of five Local 707 retirees who agreed to share their stories with the Daily News last week.
“I don’t want other people to have to go through this. We need everyone to wake up and do something; that’s why we’re talking,” said Ray Narvaez.
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OK, I said this didn't I: "Everyone told us 'Don't worry .... your xxxxxx is guaranteed.’ Well, so much for that.” Don't believe that from any big organization (especially government), and more likely you really should only believe this from family and good friends.
More:
Meanwhile, under the maximum benefits provided by the PBGC, many former Teamsters, like Ray Narvaez, said their monthly retirement checks have been slashed by two-thirds.
[snipped out: picture of this guy getting an award for service, yeah that helped ....]
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Then Narvaez, like 4,000 other retired Teamster truckers, got a letter from Local 707 in February of last year.
It said monthly pensions had to be slashed by more than a third. It was an emergency move to try to keep the dying fund solvent. That dropped Narvaez from nearly $3,500 to about $2,000.
“They said they were running out of money, that there could be no more in the pension fund, so we had to take the cut,” said Narvaez, whose wife was recently diagnosed with cancer.
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The stopgap measure didn’t work — and after years of dangling over the precipice, Local 707’s pension fund fell off the financial cliff this month. With no money left, it turned to Pension Benefit Guaranty Corp., a government insurance company that covers pension.
Pension Benefit Guaranty Corp. picked up Local 707’s retiree payouts — but the maximum benefit it gives a year is roughly $12,000, for workers who racked up at least 30 years. For those with less time on the job, the payouts are smaller.
Narvaez now gets $1,170 a month — before taxes.
I'll say it again. The financial world is in between a rock and a hard place. The plans cannot be solvent at interest rates of 0.5-1.5%. They are basing all of their future payouts on returns of 6-8%. The way to get that high return is risky investments, such as, I dunno, the stock market? The stock market, though based on production of certain industries that are not expanding much at all, must be pumped up anyway, as that's where some of this money is, while more of the money is invested in other funds, which also need to make the high return, but based on what exactly? If the Federal Reserve board raises the rates to the 6-8% range, then the Feral Gov't will be more broke and even sooner, as interest on the direct national debt of $20,000,000,000,000 will be a big part of the budget then, say 1.4 trillion bucks a year (that's at 7% interest) out of a 4 trillion dollar budget, one third of it.
How can we cover that gap, you ask? "No problem", says anyone who's been in government long and knows what he's doing - "we'll just take out a loan for the gap, you know, sell Treasury bonds. C'mon guys, do I have to give you a refresher course - it's all borrowing nowadays!"
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Tuesday night rock - Houses of the Holy by Zeppelin
Posted On: Tuesday - February 28th 2017 6:55PM MST
In Topics: Music
Just a 4 minute long hard-rockin' song from Led Zeppelin. It is titled "Houses of the Holy", yet is NOT on the album "Houses of the Holy", but on "Physical Graffitti", the cover of which, for the actual vinyl LP (not "Lyin' Press" this time, but "Long Play") had a sliding inside cover that would move some letters around in these windows in the cover picture of a couple of old stone row-houses. That is awful quaint - what was the point of all that back then? Have any of you even bought an album to get the cover as a toy? Anyone? Now, if you knew what you'd get on eBay for it 50 years later, that's different.
BTW, Houses of the Holy, the album, has not one bad song on it, and contains the excellent "Rain Song" and "Over the Hills and Far Away".
Robert Plant - Vocals
Jimmy Page - Guitar
John Paul Jones - Bass guitar and keyboards
John Bonham - Drums
Tell me if the 17 second intro is not a 6/4 time signature or something like that.
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Allan Wall of VDare - LP complains: Illegals fear President Trump
Posted On: Tuesday - February 28th 2017 6:26PM MST
In Topics: Immigration Stupidity Trump
It's like nobody goes for sob stories any more. It's not that these stories don't bring tears to our eyes like they used to; we've got tears in our eyes but they're tears of joy. The more the Lyin Press puts these out, the more any Americans who still read their crap, or hear about it like the reader will here, will be encourage to keep this all going - go Trump!
In an article in VDare two days back Allan Wall laughs at the silliness or purported stupidity of the Lying Press. In Memo From Middle America: MSM Complains That Trump Raids Sow Fear Among Immigrants. Yes, So What’s The Problem?, Wall points out some excerpts from what he quaintly calls the Main Stream Media, now known as Gov Media, Fakenews or more eponymously the Lyin Press.
The first part of the title above is the name of Allan Wall's column on VDare. The background is that the column used to be named "Memo From Mexico", as the writer and his family had lived in Mexico for many years. Mr. Wall, as mentioned in our VDare review, is fluent in Spanish so both now and when he lived there, he can give us the Mexican take on our illegal immigration situation (spoiler alert - it's strongly encouraged, and major meddling in the affairs of governments in the US is assumed to be the right of all Mexican people in power). One could learn a lot by going back through Allan Wall's columns here, though I could see it taking a week or so to read them all, as there are right about 1250 columns of his. Mr. Wall's writing is very evenhanded and moderate in tone.
Anyhow, a few excerpts:
Immigration and Customs Enforcement is launching raids and detentions of illegal aliens, leading invaders to fear an “enforcement surge” [Reports of raids have immigrants bracing for enforcement surge, by Nicholas Kulish, Caitlin Dickerson and Liz Robbins, New York Times, February 10, 2017]. ICE is downplaying it, calling it “targeted enforcement action,” no different than what was done during the Obama years. But it appears there is a real shift and illegals are right to be concerned.
And as Americans, we want illegal aliens to be concerned.
As CIS’s Mark Krikorian noted in USA Today, all that is happening is a “return to normal enforcement practices” where those who have committed crimes other than illegal immigration are still the priority, but “ordinary lawbreakers are no longer exempt from enforcement”. [Trump immigration raids show greater focus on non-criminals, by Alan Gomez, USA Today, February 16, 2017].
Yet for some reason, the Main Stream Media is running sob stories portraying it as somehow wrong illegal immigrants fear consequences for their crimes [Federal immigration raids net many without criminal records, sowing fear, by Arelis R. Hernandez, Wesley Lowery, and Abigail Hauslohner, Washington Post, February 16, 2017]. Thus, we get lurid tales of illegals being detained after leaving a church homeless shelter, and locking themselves in their homes or not going to work or school.
One bit of unintentional comedy:
[cited LP article here:]
A government social worker for Durham County, N.C., said that the number of Hispanic residents seeking assistance had dropped off rapidly in recent days amid swirling rumors about an ICE checkpoint at a Durham intersection and ICE agents making arrests in a supermarket parking lot.
“Today, I haven’t gotten one Hispanic client in the entire check-in today,” said the social worker, a longtime government employee who spoke on the condition of anonymity because they were not authorized to speak publicly.
“That never happens … They think that when they come here for assistance, that they’re going to be on some sort of invisible list.”
[Allan Wall again:]
Wow, just wow. “Hispanic residents” so fear-stricken that they won’t even show up to collect welfare benefits! What is this country coming to?
Personally, my response would be: quit worrying about some sort of "invisible list" - we have no such thing. It's quite visible, if you'd bother to look on the web or at the post office!
Great ending here, but as they say all over the internet (people that don't write all their own stuff, that is), READ.THE.WHOLE.THING.
Carlos Garcia de Alba, Mexico’s Consul General in Los Angeles, complains in the Times that people are “really scared” and “fearful.”
As Americans, we shouldn’t fear spreading “fear.” Fear is good. If ICE can keep the heat on and not apologize, many illegals will self-deport.
There are many advantages for them. They’re more likely to save their personal property and vehicles and can leave on their own terms. If they are detained and deported, all bets are off. Ideally, they will leave gradually, allowing Mexico to process returnees.
Carlos Garcia de Alba further whines that Mexicans in the United States “want to know what is going to happen and how to protect themselves.”
I have a suggestion. Why not protect themselves by moving back to Mexico?
Again, this guy writes pretty evenhandedly and really has nothing against regular Mexicans at all; heck, he lived there for many years.
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Free Tibet
Posted On: Tuesday - February 28th 2017 9:42AM MST
In Topics: Humor China
In response to this John Derbyshire post on Unz.com regarding the U. of California San Diego Chinese students forcing the cancellation of a speech by the Dalai Lama (religious leader of Tibet), commenter "Cloudbuster" opines:
I guess all those “Free Tibet” stickers on the bumpers of Progressive’s Priuses and Volvos are going to have to come off.
His comment is about the conflict in the politics between the commie lefties and the Chinese people, a large influx of which has come to universities here. There is some overlap between these groups only because the incoming Chinese become MORE politically correct after being at an American university for a while (or the not-so-bright ones, anyway).
Anyway in response to the suggestion of pulling off our "Free Tibet" stickers:
Yeah, or they could get all entrepreneurial and s__t, and, instead of peeling them off and possibly ruining the bumper-cover paint, they could add another sticker to the right that says:
en Coffee – www.commie-coffee.commie
Twitter #Zedong
hahaha … get it, Pound Zedong (instead of Mao Zedong) … hey I’ll be here all week folks … try the free Tibetan coffee, along with your favorite whores-dee-voors.
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Effect of Automation on Future World society
Posted On: Monday - February 27th 2017 8:08PM MST
In Topics: Feminism The Future
A recent post by Steve Sailer, again on unz.com (we've got a link and review now in the blogroll), entitled "When Work Disappears: Manufacturing Decline and the Falling Marriage-Market Value of Men" is his comment about a study done. The huge decrease in manufacturing jobs in the US was mostly the work of globalist elites in this country, but cannot be wholly reversed due to automation eliminating the need for these jobs in any country.
Though Mr. Sailer and the study were specifically relating this good-job loss to changes in marriage patterns, the comments turned somewhat to the effect of massive continuing automation on society in general. The following comment presented a fairly rosy view of a future, at least for the intelligent professionals thusly:
Increased productivity makes people richer not poorer (because fewer workers are needed). People do not want to work, they want what work gets them. They want something that they can trade to get things they value from other productive people.
Many of the successful doctors in my area have non-working wives who dedicate themselves to child rearing and managing the household. Maybe we will become rich enough as a society that most women can stay home, raise children and enjoy leisure like daytime tennis matches and brunches. With a quarter of the people voluntarily leaving the workforce wages would be higher for those who do work full time.
The last paragraph sounds like the world in a science-fiction story. I did not write that to sound snarky, so let me explain.
Automation and just higher productivity in general of course make the world richer (thought of as an accumulated quantity over time), or at least wealth can be created more cheaply (thought of as a rate)*, this is true. The discussions here and elsewhere about who gets this increase in wealth and/or what governments can/should do to spread out the wealth are getting more interesting and important as we can see the world going toward automation so quickly. Most of what people have to say about ways to equalize the rewards are kind of disgusting to a libertarian. However, there doesn’t seem to be a good free market way out of this because of the amount and type of people in the world and the trends thereof.
Back to the science-fiction story, the future told by optimistic stories, in the 70′s and 80′s, during my enjoyment of this literature, looked more like a sparsely-populated world (along with other worlds we we might want to hang out) where we got around in flying machines, lived in our hand-picked beautiful environments far away from our fellow man until we wanted a change, worked a few hours a day at the work we loved, and worked on cool intellectual projects of all kinds with our copious spare time (due to the automation). It sounded great to me, though I never thought that much of the automation would come in my lifetime. That was wrong on my part. What was wrong on the part of the science-fiction writers however, was one big assumption about the people in this future world.
The future people were all intelligent, and even 50 years ago, one might still rightly assume that the intelligent people would get ahead in the world and produce the bulk of the people of this bright future. Well, I should say “rightly” only if one didn’t see the welfare state and the degradation of the culture coming. This assumption was way, way off. The bulk of the population of this world is not the intelligent and well-educated crowd, we all know that by now.
The commenter's vision of the doctors and other professional’s lives sounds good, but what about the rest of the population. The problem is that lower intelligence people will not make good use of their spare time. I don’t mean just won’t make productive use, I mean, basically, will be up to no good. “Idle hands are the devil’s work”, they say. Or, I guess they can all watch 12 hours of TV a day, eat tasty junk food and just veg-out basically (“bread and circuses”), but I can see that situation devolving into a society of barely-humans at some point. That is, unless the elites of that “society” encouraged in some way (additives in the junk food?) low reproduction to slowly transform society into that in the sci-fi books. Maybe that last thing is the big plan. Possibly this whole post is just nonsense due to an overdose of zerohedge comments.
* Although peak oil aficionados and the like would differ on this with the valid point, and rightly so, that for real manufacturing (not creation of software and intellectual property) and mining and farming, there is no getting around the amount of energy needed for this work. Granted, productivity improvements can mean less energy is wasted in the processes involved, but there is a lower limit.
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UPDATE [2/28:] Link to Sailer post on Unz.com fixed.
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Are we there yet (Peak Stupidity)?
Posted On: Saturday - February 25th 2017 8:08PM MST
In Topics: Genderbenders General Stupidity
I can't see how things could get more stupid than this, but I want to be careful, as once we reach the peak, this blog may have to shut down, and what'll I do then, huh?
It used to be these kinds of thoughts could exist in people's heads, even responsible, half-way intelligent adults, but it's just that these thoughts would dissipate once the acid wore off about 6 hours later. I guess someone should check on this guy and see if he's come down OK.
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UPDATE: [ 4/18/17:] Replaced youtube video that was taken down.
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UPDATE: [ 4/25/17:] Replaced youtube video that was taken down, again, by this only one left in which a the guy took video directly off the TV! Sorry about the quality now.
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Current (recorded) Moslem population of Europe
Posted On: Saturday - February 25th 2017 7:47PM MST
In Topics: Immigration Stupidity Lefty MegaStupidity
Really, no sarcasm, they're mostly good people. However, the culture of Islam is so much different than that of the Western societies, especially European, that, even with not a terrorist among them, this cannot end well. (However, when you don't control, or even keep track of, who enters your nation, you shouldn't be surprised that true enemies come
This map is off of a VDare.com article by James Kirkpatrick entitled Make Europe Great Again: Nationalism On The Rise—But Fast Enough?.
Here is a bar graph of the same information:
People are starting to get worried, even the "tolerant" Europeans.
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Short anecdote about liars
Posted On: Saturday - February 25th 2017 7:24PM MST
In Topics: Elections '16 - '26 Trump Hildabeast
This is old news here, but hey, what else is new here, stupidity-wise. It's really just a story about liars, and the reason I write it tonight is just because this is from mid-November of 2016, before PeakStupidity went "LIVE!". I'm only writing this post now because the episode has been lost in my mind for a while.
In a hotel lobby in a northern city, about 1 week after Donald Trump won the US presidential election, some black guys came up to me to ask me a question about politics, but related to my job somewhat, which is why they asked me. The one guy talking was nice enough, and I told him I really didn't know enough about it. I had to add (probably not necessary, but I was pretty relieved about this still) "well, we sure dodged a bullet last week". After establishing that we were talking about the downfall of the Hildabeast, the one guy had words to say about Donald Trump.
It was the usual blather of garbage taken almost verbatim from the Lyin' Press - that's not saying all of it was completely erroneous but it's just that all the criticism of the man was of low priority happenings, say his locker-room talk*, etc. compared to the terrible fate of the country that would befall us if the Hildabeast had gotten more electoral votes. I defended Trump a bit, but then figured I'd take this a different direction: "Hey, some of that may be true, but, guys, did you really want that hateful, lying sack-of-shit as a president?"
You'll like this: "What has she ever lied about?" What can one say to that, really? Funny stuff came to me a minute later, such as (picking up a thick book) "Well, what day are you talking about, let me look it up." I told the guy that this lady would lie about the weather, just because she was so used to lying that it came more natural than the truth.
Now, the reason I mentioned the guys were black guys was just for the understanding of their political views. Sure, they are a major Democrat voting block - in the range of 90-95% D. vs R, in the "Blue Team" vs. "Red Team" show. If the guy just said "she would increase gov't spending, and I want the free stuff" or "She will keep 'affirmative action' going - that's good for 'us'", I wouldn't agree with him on these statist policies, but I'd still assume he was an honest man.
However, even the biggest Hildabeast supporters, and especially the ones that knew her and her corrupt background, would admit she's not the straight-arrow type and she's got plenty of problems if they had any honesty in their shriveled-up souls. "She's a woman; we need a woman president", "I like the US Feral Government to run my life", "I like us to randomly start wars in countries in the Middle East", etc., "so, we don't care about all that" would show some honesty, but "What has she ever lied about?" Dude, WTF!!! as the young-uns text to each other.
What can you do but just walk away?
* Also, do these guys think I don't know they have talked a lot worse than that at many times in their lives. See, I don't like hypocrisy either, as that makes the condemnation of Trump on this subject a lie too.
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White House bars CNN and NYT from press conference - it's a start
Posted On: Friday - February 24th 2017 12:46PM MST
In Topics: TV, aka Gov't Media Trump Media Stupidity
As discussed here and here, it's time to get some honest, righteous media dudes some access to government vs. the old LP.
Zerohedge says White House Bars CNN, NYT, Others From Media Briefing. I can read the comments from the computer I am on now, and I'm enjoying that.
We're running out of time for significant posting today, but this article made my day.
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From a post about tragedy impending...
Posted On: Thursday - February 23rd 2017 11:01AM MST
In Topics: Music The Dead
... we're gonna move swiftly to a
Nice singing, Bobby.
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University Bubble 99 - Part 4 (Conclusion, it's not a PERFECT STORM)
Posted On: Thursday - February 23rd 2017 10:23AM MST
In Topics: University Global Financial Stupidity
Part 3 of this series described the university student loan business as a real growing problem and described the root causes, the tap root of this being summed up by the phrase "moral hazard". To summarize again, with the government almost completely involved, the banks have nothing to lose, so the universities can quit worrying about keeping costs low. Students (or their parents) still under the impression that this will all pay off borrow heavily, but the good jobs of the past that would allow that have greatly decreased in number and many of these graduates will not end up paying any or most of the money back, putting it on the back of future taxpayers (if there are enough left).
Let me first state: This is NOT a perfect storm!
It looks like it's bearing down hard on Columbia University and not a moment too soon.
OK, the "perfect storm" meme, if I may, is extremely overused, which is why, though a serious problem that will end very badly, this university version of financial stupidity does not fit the definition. The Perfect Storm" was a movie that I quit watching fairly quickly (on an airplane flight, no money lost) when I could immediately tell it was going to have left-wing politics embedded, a woman as the hero and the usual crap. However, the term was most likely used by meteorologists before the movie. It means a bunch of conditions that are can cause bad weather conditions by themselves happen to converge in a place at one time, basically the worst possible combination. I'm no expert, but it would sound like: "extremely low pressure here, but a pressure ridge here funneling upper-level winds this way, and the same time a large amount of moisture in the air mass over here, yet cold air aloft flowing over it ... blah blah".*
No, the university loan bubble is not the perfect storm; it's just a bunch of things that are bound to happen whenever government stupidity (oxymoron alert) is involved and disturbs the free market. Let me put this series of run-on sentences again down here,
To summarize again, with the government almost completely involved, the banks have nothing to lose, so the universities can quit worrying about keeping costs low. Students (or their parents) still under the impression that this will all pay off borrow heavily, but the good jobs of the past that would allow that have greatly decreased in number and many of these graduates will not end up paying any or most of the money back, putting it on the back of future taxpayers (if there are enough left).
It's one thing causing the next in a slow sequence that is eventually all going on together. Going backwards, the taxpayers will not be able to pay the bill due, which is increasing rapidly as more graduates will default, because the job market is getting worse and the tuition/fees** are going higher as who will put the brakes on? The amount of money involved as of date, almost 1 1/2 Trillion dollars, is a serious number and it's increases are continuing - see the 1st graph of this post. Who will put the brakes on? I'm here to tell you (that IS what I'm here for) - it will be the prospective students and parents that realize college won't pay off. How will the universities wind down their spending spree? If you live in a college town watch out when this thing blows. Being a taxpayer will be even worse.
* BTW, with all of the series of posts on Global Climate DisruptionTM under the topic key Global Climate Stupidity, I really don't mean to bad mouth meteorologists that do a pretty good job for near-term forecast - people want to know what's coming. A post will be coming on this.
** I just realized I have not even mentioned the textbook scam. It is a real scam now - this isn't just a complaint about high prices. The best conmen of 1950's Chicago are rolling in their graves, just so cheesed-off that they hadn't thought of this scam first.
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Mission Creep by the Sierra Club
Posted On: Tuesday - February 21st 2017 11:51AM MST
In Topics: Lefty MegaStupidity Treehuggers Environmental Stupidity
If you are a longterm reader of PeakStupidity you will indubitably know that this writer doesn't watch any TV. The following Fox News clip is a coupla' weeks old, but that doesn't change the point, and this is no Drudge Report with the latest breaking stories. We've got one story to tell - the peak of Stupidity is nigh!
Let me calm down.... OK, I'm calm for now, but that won't last if I were to watch this video again. Listening to the Sierra Club president defend their political stands that have nothing to do with the wilderness or environment will bring the blood pressure up, but, wait, that's not all! Then, he as the gall to say that open-borders policies won't hurt the environment of the country at all.
The Sierra Club had been in the past one of the most respectable organizations for tree huggers, as the name goes back to the time of the first environmentalists, like John Muir who wanted to preserve first the beauty of California and the Sierra Nevada mountains. If I were a member, I'd have quit quite a while back, probably around the mid-oughts, per my thoughts in this post a few months back. More on that after this video.
This organization has got "mission creep". They want to do politics that is way outside of the mission of the organization - dues-paying members who care about the environment may not want their money supporting the crap that the guy talks about here.
This Michael Brune guy has no problem delivering blatant lies right into the cameras and my face! I can't write here what I think about him.
Here is part of the post about why the Sierra Club won't mention the biggest factor in any environmental problem - too many damn people!
I do know why the Sierra Club big-wigs won’t mention the terrible effects of illegal immigrants on the huge, beautiful, preserved wildlands of America. I learned this from VDARE.com long ago. It’s because donor David Gelbaum gave them $100 million on the condition that “if they ever came out anti-immigration” they would never get another dollar from him. [The Man Behind the Land, by Kenneth R. Weiss, October 27, 2004] As to the rank and file dues-paying members, why do they never speak up and try to change the direction of the Sierra Club and speak some truth—as opposed to just letting their environment slowly go to ruin after 100 years of arguably the best environmental stewardship any country has accomplished? Let me throw this opinion out there: the chicks are there just for the warm and fuzzy feelings they get, and the guys are in the organization for the chicks. Maybe most of them have never even been hiking in the high Sierras, as there is no 4G cell service! They’d better go soon, as whatever’s not burned down may be owned by the Chinese soon and made into chopsticks.
As the man says, "Indeed!"
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UPDATE: [ ~ 1 hr. later:] I almost forgot. This LSOS says that the Sierra Club has illegal immigrant members! Yeah, that's the ticket - they are big, big treehuggers, those guys. LSOS=Lyin Sack O Something-or-other
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UPDATE: [ 4/18/17:] Replaced video that was lost by youtube personnel.
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Ben Folds - 3 semesters of college for only 15 grand
Posted On: Monday - February 20th 2017 8:29PM MST
In Topics: Music University
All this writing about universities wouldn't be complete without Ben Folds (and his 2 other band members of the Ben Folds Five) take on the matter. You may want to go to college instead of joining the army, but after 3 sad semesters, this gentlemen ended up joining a band instead. I gotta say, it worked out well for him. Ben Folds is a true entertainer.
Awesome lyrics here - from Chapel Hill, NC, the Ben Folds Five - "Army" from "The Unauthorized Biography of Reinhold Messner"*:
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* From Wikipedia, if you can believe any of that crap, but I've heard this story before:
The title of the album refers to a name used by the band's drummer Darren Jessee and his friends on fake IDs as teenagers. The band was unaware of the existence of the real Reinhold Messner, the first man to climb Mount Everest solo, and the first to do so without the aid of bottled oxygen, until work on the album had already progressed.
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University Bubble 99 - Remedial GFS at the U - Part 3
Posted On: Monday - February 20th 2017 6:23PM MST
In Topics: University Global Financial Stupidity
After that brief intermission, we'll continue from this post, which reported the student loan numbers, with a statement of the problem, the root cause, and a conclusion (nope, no closed-form solution, sorry).
I mentioned briefly in the last post, as an aside, that student loan borrowing shot up around the time that assets fell of their peak. The total borrowed amount is, again, 1.4 Trillion dollars or so, and this number is increasing rapidly. It'd be just fine if most students were getting their money's worth out of their degrees, meaning that a cost/benefit analysis just in terms of financials, would look good (very low). That would mean that the cost of payback, with interest was within their reasonably-expected budgets of their reasonably-expected prospective jobs. The first post in this series discussed this somewhat.
It's just not going to work out though, for most students out of (and plenty more in) the STEM fields. The guy with a degree in a humanities major who studied hard, got good grades, and tried his best for good employment, may end up working a long while at the same coffee shop he worked at before and during college, but with a $50,000 to $100,000 note due, the size of the last generations' mortgage payments. Many may know this, and many may not, but what I've seen (and this is the reason for short story about the restaurant near campus) is that they don't seem worried about it. Many of the students just want to, and will have a really great time for 4 years (hey, didn't must of us in the past too!), and they just put the expenses into the one big loan amount, and quit worrying about it. However, it is a much more luxuriant and expensive lifestyle than in the past and getting moreso each year, with the fancy dorms, gyms, meals, etc. that don't resemble the colleges of yesteryear.
The number of loans in default can be measured various ways (no payments in X months, never been a payment, etc.) so I don't have an exact number. According to various articles in ZeroHedge, though, there are on the order of 20-25% of them in which the money just ain't coming. Wait, you say, "these must be payed off - they can't be blown off in bankruptcy, that's the law, and the money can be deducted when said graduate is getting Social Security". Listen, if the guy can't pay, he won't pay. Who will pay it back? That gets to the root of the problem.
Why are the students spending more borrowed money, for both the luxuriant lifestyle and the universities' big tuition/fees? A commenter on another web site was quoted here with the explanation in a nutshell, but I'll do it this time: Why would a bank officer not loan money to any student in any major when said loan is guaranteed to make money? The private bank loans are backed up by the US government, so once the bank gets it's origination fee, it is already ahead, and default or not they will be ahead, as they can pawn off this "underperforming asset". In the past, any loan officer could be fired for making a riskly loan, like $60,000 to an Art History major over 4 years. He wouldn't make the deal (maybe a smaller $1000/year or so to help the guy with his rent - $4000 total, not nearly at the same risk for default). As for the direct government loans, what can one say - you, Joe Taxpayer, are the idiot loaning these people the big bucks for 4 years of fun and luxury.
There is a phrase for this kind of thing where the market is screwed up by government interference to where responsibility is taken away from one party in a transaction: Moral Hazard. This phrase could basically be used in every post about the Global Financial Stupidity in progress in this world. The bank's responsibility is brought to zero, as they won't lose on this student loan deal.
Now, the universities, because of the non-free-market nature of their business, discussed here, also NEVER have had the financial responsibility as a real business, but, in the past, they at least could not make college unaffordable, no matter whether the service rendered was worth it or not. Now, though, why work hard to keep tuition/fees and the dorm rent reasonable, when the students CAN ALWAYS GET THE MONEY? The financial aid office will be the first to ensure the parents upon the campus visit, that "hey, we will make sure your kid will have the money to pay - our website shows you exactly how to fill out the loan forms, hell, let's do it on your phone right now, shall we?"
Therefore, as one can see on the 4th graph of Part 2, tuition has shot up to the moon. This money is being spent on the fancy gyms and dorms, more dieversity coordinators and other admins. and building sprees on campus that you wouldn't believe. A full half of the campus at the University here was not there in the late 1990's.
The conclusion about how why and how this mess will end will have to come in Part 4.
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University Bubble 99 - Remedial GFS at the U - Part 2
Posted On: Monday - February 20th 2017 8:49AM MST
In Topics: University Global Financial Stupidity
During last class the discussion was of a philosophical bent - what is the purpose of a university, who should pay for it, and how should the service rendered be measured. This time we come to the crux of the financial problem here - the US Government-backed school loans.
We use many anecdotes here at PeakStupidity, but it is good to see numbers too. Believe me, ZeroHedge lays out the numbers pretty regularly for this story. Since this is my blog, and I don't want to keep referring to the hundreds of links it would take to get the gist of it, I'll put a few graphs here shortly. First though, just to put this University Financial Bubble in perspective, back in the mid-'80's even, tuition at a state university that I am familiar with cost from $1000 to $1200 /semester, only one in 3 or 4 students had loans of any sort (except possibly from family), and one could work his way through college, including food money and a room with a decent summer job, though it could be supplemented by 1/4 time work during the school year. Yeah, kids today (!), they don't want to hear "I just worked for my college money during the summer, no problem - you kids today, what's wrong with ya'?" No, you can't do this today, and more about that to come.
This graph shows the drastic increase in money borrowed for college, but won't match some latter stuff, due to the fact that this is just Direct Government Loans.
(It's interesting that the number took off like a rocket just after the housing-bubble-burst/stock-market-crash of 2008. Parents of college students probably felt pretty wealthy with the big bucks "Equitized" in their McMansions before that - some of the kids may have gone to school off their parents' HELOCs (Home Equity Lines of Credit). Also, people must have felt pretty confident to spend with their 401ks jacked up with the market - that was one round, we are in another round now.)
Here is a closer up graph of one decades worth, and older one that ends in 2013. The 2012 y-value on this graph does not match that on the last one, due, again, to the last being only US-Gov't-Direct ones. This one shows total student loans including from private banks, BUT, the private ones are backed by the Feds, and this is the root of the problem - explanation coming. Let me give you an approximate number from 2016 - 1.4 Trillion big ones. The number is still increasing at a high rate.
( I see this came from an article in "Mother Jones", ugggh, but they didn't make the graph.)
Now, granted there are more and more college students each year until peak stupidity, due to both the false assumption that any degree will still get one a decent job, but also due to the influx of foreigners - they are not in the financial picture here, except by increasing college revenues even more. Therefore, the next graph will show borrowed amounts per student, which shows us more about the effect of this loan situation on individuals:
The last graph here shows the large increase in tuition (and FEES, which can be very significant for part-time students, as these fees are fixed regardless of the number of credits taken in a semester), along side a graph of increases in family income. That's a big disparity.
So those graphs just show the overall trend, and the $1,400,000,000,000 in total loans outstanding last year sometime, along with information about defaults, will fill in the rest of the numbers.
The next post on this, hopefully today, will discuss the what the real problem is, and the root cause.
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Climate is not Weather - but hey look at these!
Posted On: Saturday - February 18th 2017 12:13PM MST
In Topics: Humor Global Climate Stupidity Pundits
WINTER FREAK!
ALASKA WARMER THAN WAY DOWN SOUTH IN TIERA DEL FUEGO!
PT. BARROW 72F
INDOORS!
Like I said two can play at this game.
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It's called "weather" - let's get past it, people
Posted On: Saturday - February 18th 2017 12:07PM MST
In Topics: Global Climate Stupidity Pundits
Matt Drudge had seemed to be pretty hip to the whole Global Climate DisruptionTM hoax, but he's pushing the extremely-changing-weather meme on his site today.
Or is it that there is a girl in a dress with some legs showing, hey, does he really need more page views?
OK, Matt Drudge, Two (plus however many porno sites are out there) can play at this game!
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Of-Two-Minds / PeakStupidity on constant economic expansion
Posted On: Saturday - February 18th 2017 8:13AM MST
In Topics: Pundits Global Financial Stupidity
A guy named Charles Hugh Smith writes a great blog that goes by the name of "Of Two Minds". Here is the latest post by him on the Financial Stupidity that is going on, in terms of debt. This guy does a great job and his post here, along with (possibly all of his) others is featured on ZeroHedge
Here is just the part of it, but you must read the whole, fairly simple, post of Charles Hugh Smith to get his point (the Bold is from the original):
The politics of the past 70 years was all about horsetrading who got what share of the growing pie: the "pie" being cheap energy, government revenues and consumption, sales and profits.
Horsetrading over a growing pie is basically fun. There's always a little increase left for the losers, so there is a reason for everyone to cooperate in a broad political consensus
.
Horsetrading over a shrinking pie is not fun. Everybody is shrilly demanding their piece of the pie should either grow or be left untouched; any cuts must come out of someone else's slice.
The key point, from us and Mr. Smith, is that over the last 1/2 century, this expansion of "the pie" has been accomplished by borrowing, not actually increasing the real wealth. A big portion of the dough and filling have been borrowed from neighbors, to keep this analogy going, and they will want to get paid back eventually, but the pies are being eaten. (Mr. Smith uses 70 years, but the first part of that was all real creation of wealth).
Now, Mr. Smith didn't make up the three good graphs that appear with this article, but did do a great job picking these ones. I have lifted them to use in more detailed future posts about financial stupidity. His illustration of the debt problem we are in is a much better summary than I have written in the Global Financial Stupidity Topic Key in the series starting here, but especially in this one, regarding future obligations and the interconnectedness of all this debt.
Mr. Smith again:
The debts, unfunded liabilities, demographics and diminishing pools of income to tap are beyond policy tweaks and minor cuts. Take a look at these charts to grasp the unwelcome realities: sorry, we can't "grow our way out of debt" because the debts and unfunded liabilities are simply too large and expanding at too fast a rate.
ZeroHedge commenters also bring this up a lot: Government and Big Business, often almost one-and-the-same anymore have this idea that expansion must go on; this means expansion of revenues, profits, the amount of consumers or the spending power of consumers or both. (Notice I didn't say expansion of employees - they don't seem to care about that.) You will hear this over and over - "a business must grow, or it will die!" To me that one expression is one of those peak-of-stupidity things like "diversity if a strength!" that I wondered the truth of from the first time I heard it uttered. "Why?, Why is diversity a strength?" Why? Why will a business die if it doesn't continually expand". "Why do you spout bullshit and expect everyone to just believe it?" - that's another one.
I have worked for organizations of wide-ranging size from just myself (as I recall, I had the best boss in that job, come to think of it), 2 - 5 people, 10, 15, 200, 5000, and over 70,000 in just one location. In the smaller companies, I never found that I or anyone thought that we were going to be in financial trouble if we didn't keep growing - no such thing at all came to mind. In the bigger ones, who knew WTF was going on with the big shots? They didn't want to talk
Improvement is great and necessary for keeping competitive, but it doesn't have to come from constant expansion; what you do is increase productivity by constantly learning, changing out equipment or methods, and not being too complacent.
The constant push for expansion by Big Governments and Big Business shows either an ignorance or disregard for the limitations of resources of the planet and the quality of life of your average Joe who is not one of the elites in Big Governments and Big Business. This is coming to a head now due to:
a) The absolute population numbers are really getting up there, and the productivity of mechanical and electronic machines is getting so high that there are not so many place for the average Joe in this world.
b) The increases in population are in the regions of the world and in the sector of each population that are the most uneducated and of lower inherent intelligence. The world of the near future will not have a need for these ones due to (a). The big disparity in fertility between the uneducated/ignorant/stupid and the educated/developed/intelligent is mostly an effect of many years of Government policy put into effect by the supposed smart people of yesteryear. Some of the educated/developed/intelligent (the commies, aka "socialists") crowd really didn't have the smarts required to go change the world properly after all.
c) This is in addition to the Financial Stupidity problem - being in the huge debt-hole just makes things much worse. The grandchildren of these commies and the grandchildren of the innocent (of f__king-up the world) will pay the price for this commie-created stupidity fairly soon.
* BTW, don't confuse this guy with Brandon Smith, also featured a lot on ZeroHedge. Brandon Smith has a good website called Alt-Market which features much of the writing on the Global Financial Stupidity that both ZeroHedge and OfTwoMinds also do. My only one-time dealing with Brandon, however, when writing a comment to correct a small error, resulted in him wiping out the comment and figuratively foaming-out-the-mouth about it. I had praised the article and just told the guy that fixing the obvious error (the Confederate Army did not march on Ft. Sumter, seeing as how it's a coupla miles into the Charleston harbor from the battery) would avoid turning off readers only due to their lack of trust in his literacy.
Anyhow, he's a different guy.
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University Bubble 99 - Remedial Global Financial Stupidity at the U
Posted On: Friday - February 17th 2017 8:01AM MST
In Topics: University Global Financial Stupidity
First off readers, this post is a prerequisite for the understanding of University Bubble 101. If you mistakenly read that post before this one, you must:
a) Report to the adviser for Global Financial Stupidity Studies, get a signature, and bring that paperwork over to the registration building to sign back up and pay your fees again (not to worry, it will all get lumped onto your school loans - no hassle for you).
b) You may "test" out of this remedial level course by showing proof to the Dean of the College of Global Financial Stupidity that you have perused and commented on ZeroHedge for the last 3 semesters. You WILL NOT RECEIVE CREDIT for the course, if you have not used the phrase "Gold, bitchez" at least on one occasion. There are NO EXCEPTIONS."
OK, housekeeping aside now, let's start by saying that the University Bubble 101 post was premature. I understand that the reader may wonder how this writer made a simple financial dealing at the local restaurant into a BIG FINANCIAL BUBBLE. Let's give some background in this post then.
The higher education business is different from most big business for a number of reasons. The first is that it is not clear who is the real customer - sure students pay tuition and expect a service out of that, but the state government chips in a significant share for many colleges. The idea
In the case of private colleges, there are donors who really want the type of learning that goes on there to continue. It was somewhat more of a free market, as, before recently when the loan-bubble ramped up, tuition would be what the market for this sort of thing would bear on the part of the students.
Another reason higher-ed is not like a normal business is that the bigger universities bring in research money. The original idea is that this is also good for the state and society in terms of the eventual benefits therefrom, and graduate students would get more learning in the process. I think that this noble concept has also been corrupted, as nowadays, the research associated completely with bringing in the money. It's not about education so much, and the learning suffers greatly. Well, it does sound like a normal business, you may say, but the differences are the labor is not free-market labor, but grad-students mostly imported for the work only (who cannot teach well due to poor English), and these university research groups are very much in cahoots with governments of all sorts (yeah, regular business is about this way now too, granted).
Lastly, to define what the service really is that these "customers" - the students and the taxpayers of the state (or donors), are receiving, it could just be the piece of paper. For many employers, this is not necessarily a certificate of "knowledge gained", but also an indicator that this guy can at least work toward a long-term goal - the work it took to graduate The knowledge part is one thing, but for humanities majors, for instance, even in the past, it did not really place the graduate in a certain job. However, for all majors, but especially for the non-STEM (Science, Engineering, Math, Computers - hey, that doesn't spell STEM - we may need to get schooled here) fields, the 2nd part is key. In the past, with very good higher-ed in this country, employers could figure the non-STEM graduates were already screened. As many on the alt-right have rightfully said, this was even more important after the use of IQ tests were outlawed for reasons of being too fair, I guess, and making people notice who the dumb people were.
Here's the problem - the way the job market for decent jobs is now, and with the drastic lowering of standards for college graduates now (partly due to enrolling anyone who can pay - guess what - they all can*!), the piece of paper obtained by the one of the customers, the student, may not be worth so much. The only measure of this is whether the individual obtains a job that would be better in pay and/or quality than one he would have gotten 4-6 years earlier as a non-customer of higher-ed. The institutions may or may not measure this, but payment for service is not contingent on this metric (hey, I could be a lawyer.) The other customer, the taxpayer of that state, really never had a say in this either. This means there is what we economists (or those of us who play one on TV) call a "moral hazard" here. Without the feedback loop from the loss of business, $$$, and goodwill from the graduates who have not gotten their money's worth, the incentive to change policies (admittance, standards, teachers who can speak freakin' English, etc) is non-existent. This is the problem
We did not get into the money part of this today, as this lecture was taken from the notes of a colleague who scribbles in Chinese ;-} OK, go out, play frisbee and drink beer. See you next class (Oh, yeah, you, young lady - the blonde one - I may have a quick extra-curricular assignment for you - see me in the office.).
* This is due to the government-backed student loan madness, producing the bubble of which this post intended to cover - coming next class.
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White Wedding - Billy Idol
Posted On: Thursday - February 16th 2017 8:04PM MST
In Topics: Music
No matter whether you don't like the melody or the sound, or even the lyrics, you've gotta admit one thing: Nobody can sneer like this guy!
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