I have been listening to the news about Grexit and how bad things are in Greece and in Europe, in general, and I have been pondering about our own situation in this country, the good old US of A.  In addition to pondering, I started looking around to see if I could validate some of the claims being made by people that this could never happen to us, it's happening in Greece and Europe because they have mismanaged their affairs and so on.  Really?

So, Greece's public debt is ~400 billion dollars and the US's national debt is about 18 billion (http://www.brillig.com/debt_clock/), but this would not, or could not happen here? Well, pundits will say, yeat but Greece is tiny country of about 10 million  and we are over 315 million, that's why our debt number is much higher, it makes sense, right?

Well, it turns out that according as of 2014 (last year), the per capita public debt of the USA is higher than that of Greece.  Yes, that's right, each one of us owes more money than a a person in Greece. While looking for that information, I also unearthed some other countries with a surprisingly high per capita public debt.  See if you agree with me:


Country Per Capita
Public Debt ($)
--------- ---------------
1 Japan 99,725
2 Ireland 60,356
3 USA 58,604
4 Singapore 56,980
5 Belgium 47,749
6 Italy         46,757
7 Canada 45,454
8 France 42,397
9 UK 38,938
10 Switzerland 38,639
11 Austria 38,621
12 Greece 38,444
13 Netherlands 37,233
14 Germany 35,881
15 Norway 34,910
16 Spain 30,031
17 Finland 29,930
18 Denmark 28,778
19 Portugal         26,770
20 Sweden 25,155

Here is the source: http://www.bloomberg.com/visual-data/best-and-worst/p/countries/japan

LinkedIn is not the same as Facebook, or it shouldn't be!

What is happening with LinkedIn?  

When everyone was creating facebook accounts, I was reluctant to join them.  I wasn't sure I wanted to spend my time updating my hourly social timeline, "now I am dressing my kids, I am on my way back from the supermarket, my dog just bit someone,..." No, I don't think there is anything wrong with it.  If someone has the time and desire to post and someone else has the time and desire to read such updates, more power to them!  I just didn't care to do neither.  Reluctantly, I joined the crowd and after a while, I realized it wasn't so bad.  So, you share personal moments with friends, you tell your cousin about little Johnny's first steps, plus it gives you a chance to socialize for a few minutes a day, why not?

LinkedIn, not that's a different thing altogether, I thought.  It's a "professional" network where people of similar interests meet to discuss and exchange ideas about topics they share a professional interest in.  A place where you can network, meet more people in your field, share technical information, and so on.  And, that's what it was, at first, for a few years.

But, leave it to the social law of the lowest common denominator.  Everything, always levels off at the lowest level it could be, without crashing/imploding, the level of mediocrity.  

It wasn't long before LinkedIn posts started to appear about someone's horse being sick, someone kid starting kindergarten, someone's father celebration their 75th birthday.  Hey, I have no problem with you being proud about any of  these events.  I can understand you wanting to share these events with friends, seriously, I do.  But, do it with style and consideration for people you are connected with.  Do it on Facebook,  whose purpose is just that, to share social type information with your relatives, friends and neighbors.  Let LinkedIn be what it was supposed to be, a professionals network.  

Chine posed to capitalize on space, when the time comes

China completes the first soft landing on the moon, most certainly to be followed by landing humans on the moon, not in the too distant future.  And, the US the lead the space race for decades is quickly falling behind (and not just behind China).  What happened to us?  Is China just wasting money on their space program while we have wised up and realized that such investment may not be worth it?  I don't think so!

I believe we have just gotten complacent and allowed this to happen.  There is no question that space will be the arena where market competition will be taking place in the future.  There is also no doubt (in my mind) that if one wants to be ready to compete in the future, they need to start preparing now!!!  Unfortunately, our leaders have lost sight of that :-(  We'll ALLsee the results and pay the consequences, in the future, but it will be too late to do anything about it.

Sad, sad state of affairs.

Only elimination of corruption will help Europe

I have been following the European economic crisis for the past year, or so, who hasn't?  I closely watched the Spanish bailout, the downgrade rating of the Italian and French banks, the two rounds of elections in Greece.

Then today, I read that the 4 powers of Europe are meeting to discuss their plans for getting out of this mess.  Germany, France, Italy and Spain are meeting to solve the problem.  What, are they just kidding themselves?   So, Spain is broke and borrows money at very high interest rates, Italy and France are almost at the same situation (totally broke and paying high interest rates) and Germany is the only one that may still have some reserves to help out.  So, how are the other three going to help the European crisis?  What are they going to do, threaten Germany that if they it doesn't decide to help them they will go bankrupt and take it down with them?  I mean, what will be their contribution to the possible solution?

I am not an economist and I know that most of us tend to oversimplify things but from what I've read so far, and I've tried to read a lot on the subject, although not the only one, a primary contributing reason these countries are is such dire economic condition, is the rampant corruption and misuse of public funds.

So, why not start correcting the problem at its root?  Fight corruption, prosecute anyone involved, put them in jail and revert ownership of anything they own back to the public coffers.

That might be a good start to get on the road to recovery!  Unless and until this happens, all these bail-outs and loans that are supposed to help the average citizen of the suffering countries cope, will instead go to lining the pockets of the same, few corrupt individuals!

Greece and the Referendum

Papandreou's decision to ask for a public referendum vote was a cold, calculated political move that may backfire for him and for Greece.  It's nothing new, it's an old maneuver.  Everything his government has tried over the past two years, hasn't worked.  The people don't want the austerity measures, the international financiers are not happy with the results of his actions, the opposition is crucifying him every day, so he pulled the oldest trick in the book - if you are being criticized for a problem, then make those who criticize you part of the process and thus part of the problem.

The EU powers, Germany, France,... are worried about the outcome of this.  Can you imagine if Portugal and Spain followed the example of Greece and had a referendum every 3 months to decide if they will accept a new monetary solution offered to them?  Chaos!

Nothing wrong with referendums, but you can't have it both ways.  If you believe that when the populous elects you in general elections, they provide you with the mandate of leading the country and representing them, than that's the only referendum you need.  If you are not sure, then you need to have a referendum vote early on, not after your actions have led the country and its people to the abyss, and after you've turned EU and the international community upside down trying to find a solution for you, and have agreed to the solution they finally come up with.

German people were NOT happy about bailing out Greece, they have been saying that for the last 2 years.  They claim Greeks are lazy, they don't want to work and always complain.  So, what should Merkel do?  Have a referendum to see if Germans wanted to bail out Greece?  No, as a leader she did what she know was good for the country and the country's leading position in EU, knowing that Germans would not like that and she might pay for her actions in the next elections.  That's what leaders that are interested in the good of their country (and not always in political benefit) do!

What will happen now?  What if indeed the Greek people reject the "deal" the international economic community has put together and Papandreou accepted at 4:00 last Saturday?  Is it back to the Drachma, with all Greek debt (~ 500 bn) in Euros?  The Drachma will have to be devalued by 50% or more, the minute it is established, in order to increase the economic viability of Greece.  So now, they will owe the equivalent of 1 trillion euros (in Drachmas).  How do they get out of that one?

The whole world is watching.  Somehow, Greece has managed to be the center of the storm, and in the headlines many times in the past few years. A glimpse of their past, where their actions influenced humanity?  I doubt it.

Buying/Selling Stock Logic, or NOT

I am not a big investor, heck I am not even a small investor, but I like to believe that if I were one, my decisions on when to invest and when to bail, would be a lot more logical.  Sure, I understand that investment decisions are not always about logic, sometimes they are about how one feels about an investment, it sort of becomes "personal" for most investors.

But here is one thing I never understood.  Someone buys a stock at $10 a share.  They hold it for 5 years, and then something happens and the stock tanks within a very short period of time, let's say within a couple of months.  SO, the peron finds themselves holding a stock that paif $10 for, being worth only $0.75.  So what should thry do?

(a) for most of them, it's hard to seel it, because that's like admitting failure and and giving up hope that the stock may go up again (all humans need to have that hope).

(b) some rationalize that they have to seel it so that they can at least write off all the losses from their investment (though deep inside, they are sad they are selling it, because they are giving up on the hope of the stock coming back up).

Why couldn't they think about logically and,

(1) Sell the stock for $0.75, this way taking the full loss write-off and,

(2) taking the proceeds of teh sale and purchasing  "SIMILAR" stock (one that was about $10 and has lost its value being about $0.75 now).

The get the best of both worlds.  They get the write-off ans still have a stock that may perform well, if the economy recovers, thus making a profit.

What am I missing here?

Should Greece Fail?

A day hasn't gone by, in the last 2-3 months, that we don't see dozens of articles about Greece's economic fate, the first, second, third loan bail-out, the revolt of the people in the streets, etc.  Really, though, why are these Greek people in the street whining?  Why do they think that the Eurozone or the IMF "owes" it to them to lend them the money they need?  Or, are they right?  The general thinking is that massive overspending on social programs; years of capitulation to union labor’s unreasonable demands; mind bending corruption at every level; and tax evasion on a grand scale is what had brought Greece to its knees.  No-one can argue with all that, but the problem is much deeper than that.  For example, why were the Greeks given all that money to spend (borrowed money) in the first place?  Who helped them make all those investments in "junk" bonds, that made money for the "consultants", and why?    BTW, parenthetically, Greece is NOT the only country that is in dire economic conditions, for the same exact reasons.  Many other European countries, and the USA, are right there besides Greece. The culprit is called "deficit spending"!   That's how they all got in trouble.

Back in 1967, Greenspan - a great economists before he became part of the establishment, said, "Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process.It stands as a protector of property rights".  And, that was only about 5 years before USA abandoned the gold standard, a sad day in its economic history.

Anyway, back to Greece.  It should NOT have adopted the euro, ten or so years ago.  Once they did that, control over their economy was handed over to the European regulators and they lost the freedom to deflate their currency, when needed, to increase tourism and improve their economic picture.  Having said that, talk about dropping the euro now and moving back to drachma, is just that, talk - it doesn't make much sense.  Their debt would still be in expensive euros, the drachma would de-valuate the day after they adopted it, based on their economic state, and thus their real debt would double overnight.

Plus, the European leaders would not allow that to happen, because it would signal that other countries in economic trouble could do the same thing.  So, what is going to happen?  Or, what should happen?  Should Greece refuse the new aid package, that would force new austerity measures, and just go bankrupt?

The Europen Union will NOT allow that to happen.  Once again, if they allowed Greece to default, that would signal that everyone in economic trouble could just default and face no consequences.

So, what will happen?  It's not very clear, I guess we'll have to wait and see.