The Stingy News Weekly (08/21/2011)
How long can home prices keep rising?
"I canít tell you when the housing correction will come. But I can tell you that when it arrives it will be correlated with other bad news. And itís the second correlation that worries me."
"What the hell is going on? Standard and Poor's, the bond-rating agency, downgrades the U.S., and the world trembles. The markets here go nuts on the first trading day after the downgrade, losing $1 trillion in value. European Union finance chiefs are playing Whac-a-Mole with members' debt problems. And England Ö England was literally burning."
An hour with Warren Buffett
"Warren Buffett discusses his New York Times Op-Ed piece 'Stop Coddling the Super-Rich' which calls on Congress to increase taxes on the Super-Rich like himself"
Debt crisis at colleges
"With mortgage defaults, banks seize and resell the home. But if a degree can't be sold, that doesn't deter the banks. They essentially wrote the student loan law, in which the fine-print says they aren't 'dischargable.' So even if you file for bankruptcy, the payments continue due. Hence these stern word from Barmak Nassirian of the American Association of College Registrars and Admissions Officers. 'You will be hounded for life,' he warns. 'They will garnish your wages. They will intercept your tax refunds. You become ineligible for federal employment.' He adds that any professional license can be revoked and Social Security checks docked when you retire. We can't think of any other statute with such sadistic provisions."
A second great depression, or worse?
"According to the National Bureau of Economic Research, falling from peak to trough in each cycle took 11 months between 1945 and 2009 but twice that length of time between 1854 and 1919. The longest decline on record, according to this methodology, was not during the 1930s but rather from October 1873 to March 1879, more than five years of economic decline."
The $25,000 Cow
"What I have in mind is some sort of scheme whereby the government would restrict the supply of opinion in magazines and newspapers to some fixed number of column inches per year, with a view to propping upóer, stabilizingósalaries at a target rate. Naturally I am sensitive to the concerns of magazine readers, not to mention magazine owners, but I donít imagine it would raise the cover price of magazines by more than about 200 per cent or so. No? Foolish? Extortionary? Outrageous? Then allow me to introduce you to the world of supply management: an actual policy pursued by the governments of Canada and the provinces for the past 40 years. Only Iím not talking about comparative fripperies like magazines (we have our own indefensible support programs, though not, ahem, on the same scale). Iím talking about basic foodstuffs, the kind the typical Canadian family eats every day: dairy products (milk, cheese and butter), eggs, and poultry (chicken and turkey), whose prices are maintained, by means of a strict regime of production quotas, at two and three times their market levels."
Buffett misses mark
"The United States needs to get out of its box of low growth. Current proposals for tax increases are the wrong medicine. Instead, a rate-reducing cum base-broadening tax reform would be more powerful by reducing the economic cost of taxation. Buffett pays too little tax, not because heís so rich but because the U.S. tax system is so poor."
Stop coddling the super-rich
"Last year my federal tax bill ó the income tax I paid, as well as payroll taxes paid by me and on my behalf ó was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income ó and thatís actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent. If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine ó most likely by a lot."
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