Friday, September 21, 2007

the humbling of our great country

saw this just now on yahoo finance:

Canadians are expressing pride in their economy but might be more inclined to go on shopping sprees in the U.S. after the Canadian dollar reached parity with the U.S. dollar for the first time since 1976.

with the dollar falling and gold and oil rallying, I think we may have begun a long awaited selloff in the dollar that will render all of us poorer by 33-50% in the next year or two. I have no scientific way of setting that amount, but there is a huge amount of dollar negativity brewing around the world. now that it's thru a certain level, no one will step in as a buyer for a while. that's the way trends happen. today was just a dawning of that.

I think EM and other intl stocks will go nuts in coming months in one finally bubble-mentality rush towards the beijing olympics.

it's just worth noting that history is being made. for the first time in over 150 years, america is no longer in a positive uptrend. we're clearly at the end of a long run of greatness, and the currency decline will cause a broad longer term malaise of high prices, high rates and low growth. however, there will be strong demand from overseas. after running a huge deficit in consumer products, we'll now be serving more foreigners as tourists and visitors. one has to wonder what kind of humbling impact that will have on our country and our younger people. will we be like the brits in the 1960s, the post imperial generation?

anyway, history is being made. when you consider the pathetic weakess of the dem presidential debate, completely lacking in any new ideas. no, america needs to find its way again. it's not going to be pleasant.



we're clearly entering a new phase where the

Wednesday, September 19, 2007

the lost decade ahead?

in the wake of the rate cut, I really fear we'reheaded in the same direction as latin america 25-30years ago. when commodities like wheat, oil and gold are at highs and the dollar is plunging, I just can'tbe happy to see rates go lower. I think people in theUS vastly underestimate the rest of the world's patience for our errors. with credit investors, once something like the lack of transparency in subprime happens, they will start to ask questions about everything else.

in the process, the new story globally becomes "look how messed up the USA is." our primacy in the world allowed us to remain the benchmark for global ratesfor a long time. those days seem to be finally closing. when china revalues the yuan AND holds theolympics, our country is certain to lose luster. throwin what could be a very uninspiring presidential election, with washington continuing with business asusual, and there's really nothing to be positiveabout. -- except that the fed just cut rate. that really is the only thing going for this market right now. at the end of it all, the USA is going to weaken as a credit. we have a lot of unfixed problems from the last 70 years. is it just time in the cycle for us to be brazil for a decade or two?

Tuesday, September 18, 2007

america's waning authority

when I see stories like this:

WASHINGTON, Sept 17 (Reuters) - The U.S. Department of Justice, which has been overseeing an antitrust settlement with Microsoft for five years, said on Monday it was "concerned" about a European court's decision to uphold an antitrust ruling against Microsoft (MSFT.O: Quote, Profile, Research).

it's merely one more example of how the US govt bombards the world with little messages saying "we don't approve of this.. or that." such urgings have fallen on deaf ears in places like caracas, literally placing our heads on the chopping block for chavez to disregard us, showing others it's possible and even ok to differ with the USA. now you have europe following decisions that don;t only threaten to limit the market shares of major companies like aapl. monday's decision was an outright rejection of american philosophy and authority. europe has chosen its own path for this issue and doesn't really care what we think.

it also makes me think of how US investors have shied away from US stocks ever since the dot-com bust in 2001... in 1-2 years as the subprime bomb goes off, what will overseas investors say about USD assets? I think the whole notion US assets are safe is going to deteriorate.

Friday, September 7, 2007

two ideas to deal with health care

there are some basic things that need to be brought to the forefront in this political climate. we need to stop being so inefficient and rigid about how we deal with problems.

to start, one solution to many problems, ranging from health care to college education, is to create an organization that gets young people to care for the elderly, in return for the government paying their education IF they study medicine. this will also help counter the effects in our culture of video games and other activities that isolate youth from adults. the current youth culture seems full of problems culturally and healthwise. there seems to be a new generation that's more communal and uninterested in the same institutions that have served us for decades. most of our institutions like social security, health insurance, federal student aid etc trace their origins to the 1930-1960 period. its time for new solutions.

for the first time perhaps ever, our problem is not a lack of overall wealth. even the poor in this country have more than they ever would have imagined even 50 years ago.

our problem is the way we organize the work for millions of people, and the way we deal with our needs. our system grew incrementally over decades. like the NYC subway, it was built over stages to deal with individual problems. it's remarkable how well it still works, considering how poorly it's planned on a macro level.

it seems to my less than fully informed eyes that health care's problem is that costs are paid by a separate party, preventing any kind of market forces from operating. instead of individuals making decisions and accepting prices, someone else makes it INCREMENTALLY free. in other words, each greater bit of service you consume doesn't cost you anything extra (yes there are co-pays, but they cover such a smart part of the overall cost...) people don't make decisions based on price. instead, the HMOs try to connive and bully doctors into cutting costs. instead of dealing with a sick person, they employ an army of clerks to deal with the insurance companies. they're not encouraged to behave like retailers, which do the best job serving people's needs.

as a result, the patient never knows that the doctor is charging $150 for a 15 minute visit. if he/she were to learn this, he might call the doctor a theif, until he learns the doctor must pay $80,000 a year in liability insurance. if the patient/vote were to feel the pain of this cost personally, it would hurt everyone enough so that politicians would quickly limit medical malpractice suits. but since we outsource the responsibility to a company that everyone hates and shouldn't even exist in the first place.

normally when a transaction is made, one person bears the cost and is fully aware of the pieces of the deal. if I buy a car, my money is being used to deal with somehting I need done. I alone know how much money I have and how important it is that I have a vehicle. I know whether I own a garage, whether I like the car, etc. all of the knowledge and money behind the decision is united in one conciousness. this is the way most decisions are made in the world.

our current healthcare situation, however, divides the decision making into peices. the cost is decided in a negotiation by a massive company by some complex method I won't even pretend know anything about. but the decision itself of the cost (will you as a consumer surrender x amount of your resources for a service?) is not made by the person consuming/needing the service. since it's officially free to them, they have no incentive to make sure the costs are resonable. the decisions about cost are also made by all of the employers who chose health care providers (along with 401ks, which is totally unjust). somewhere executives of giant companies hold sheets with hundreds of thousands of employees being maintained as if they were machines or the electric bill. it just becomes one more cost. again, the decision is made nowhere near the consumer, or by anyone remotely intimate with his situation.

health care is a noncyclical core service in the economy. other providers of necessities like food and clothing have been profitable businesses forever. for decades, we've managed to shop and make the decisions about most of the things in our lives by spending our money the way we chose. it's time to move healthcare into that sphere of activity. imagine if we had food insurance that would pay for our groceries ... after a co-pay of course .. imagine only being able to shop at in-network groceries ... the insanity of it is clear. but why, essentially, should health care work that way? the truth is that HMOs arise from a few tax decisions made by congress in the 1940s and 1970s. it all started during WWII and companies asked for permission to pay their employees health costs as a way to give them more compensation without giving them actual raises, which weren't allowed under the price and wage controls. it's a good example of how we're still living under the shadow of the new deal. so many institutions date to that time and are so obsolete. finally, I think HMOs make doctors less compassionate because it allows them to not be responsible for the cost of service. in essence, the HMO system looks a lot like life with a ration card in the USSR.

the solution doesn't involve more money. a good solution will solve many problems so that many people want it to happen.

one possible solution is to use this problem, healthcare, to solve another problem, youth culture. between video games and hip hop, it has grown terribly self-centered and belligerent. but there also seems to be a new kind of awareness of the need to solve problems. volunteerism is supposedly on the rise for many kids, according to cokie roberts and william frist on charlie rose... why not create a program for kids of 14-20 to care for the growing elderly population. part of it should be mandatory, like the draft. it should be added to school graduation requirements, like in jesuit schools. if they want to continue after high school, they should get paid at the low levels typical of the military, but will then have their college education provided if they stay in medicine.

this will solve one of the big disincentives for people becoming doctors: the fear of borrowing $100k-300k at the start of their careers. it will also give our kids a sense of community and service. the same way the draft brought together a nation with the colorful diversity of the proverbial WWII movie. the draft has been gone for more than 30 years now. young people have no uniting institutions. a call to service could do a lot of good. plus, it would allow them to learn from the baby boomers and make friends. some of them could become archivists, historians and writers about the baby boom generation.

how much help they could offer I do not know. but it is something worth exploring further. I will try to find the #s for healthcare workers and teenagers.. I imagine there are probably far more teenagers than health care workers.

secondly, they could create a system where medical offices have peple who arent doctors. one person could be trained merely to deal with knees, or sinus problems, etc. they could just study that one thing and treat those individual problems. they could then be overseen by a doctor who would review the info on all the cases in real time.

these people could also use flow charts, like the health care flow charts for doing STD interviews in africa.