Laying in bed thinking about stuff

I couldn't go to sleep fast enough last night and when that happens, my mind thinks too much. I'm going to write it all down and hopefully remember everything I thought about. I started thinking about US companies moving production lines to other countries and how many products we buy that are made in foreign countries. What drives companies to shut down US operations and move? At face value, it looks like lower wages in other countries. They are so much lower that supposedly products can be made there and shipped back to us cheaper, thus making the company more money. What's odd about that thinking is that many foreign car manufacturers are doing the opposite. They are making their cars in the US. One would think that building a Honda in Japan and shipping it here would be cheaper and would make the price lower but that's not the case. Many times, Hondas were more expensive, as were other foreign makes. Now, they are made in the US, with no affect on the price. Why is that? Unfortunately, the current recession tends to make us look for the best deal, regardless of where it was made. Our stores don't help much either. Most times, there aren't US made alternatives to Chinese products. Look at Walmart. They used to promote the whole "made in USA" thing but good luck trying to find something there that is made in the USA now. You would think the Chinese own Walmart! If only we could get to a position where stuff was made and sold in the US like it used to be. Unemployment would drop and our huge trade imbalance would lessen. It would keep more money in the US where it belongs. Putting people to work would settle the housing market, too. Where did our pride in US manufacturing go? I guess US manufacturers have to move jobs overseas to compete with importers. Why can't we impose more tariffs to level the playing field? Congress isn't much help. They are all so deep in foreign pockets that we can't get any legitimate legislation to settle the trade issues. I wish I could find out what kind of margins the US companies are dealing with. Somebody is making the big bucks and it ain't the peanut farmers.

Would you use a $1 coin?

I run across some oddball stuff occasionally and today it is the Coalition for the $1 Coin. This is a group that is pushing to get rid of paper dollars, replacing them with coins exclusively. The claim is that it would save money and be better for the environment. The group's members include the National Bulk Vendors Association and PMX Industries, who makes the coin blanks. The vendors association would save money by not having to swap out the paper dollars. The vendors also claim that they spend a billion dollars a year just fixing machines with jammed dollar bills in them. How many people would be out of work if they couldn't be repairing vending machines? PMX Industries would have work. Note that PMX is owned by Poongsan, a giant Korean conglomerate supplying copper products around the globe, including ammunition. Just what we need, more of our money going to a foreign company. The General Accounting Office (GAO) claims that the US government would save $522 million a year because the coins are more durable. Their claim is that it cost 3 cents to make a paper bill that lasts 21 months versus 16 cents for a coin that lasts 30 years. They supposedly would have to make 17 paper bills to match the coin's lifespan. Drag out your billfold. Check out the dates on your dollar bills. I did. I had 3 bills, 2 dated 2006 and one dated 2003. That's more than 21 months and they aren't worn out yet. The "green" aspect probably can't be verified. I don't know which is worse on the environment, copper mining or paper production. They are both recyclable. The fact that this idea is being pushed by private industry is no surprise. The government's involvement is tainted by the fact that they allow influence from private business to sway their decisions. Just the physical aspect of a dollar coin is a problem. They weigh more than a paper dollar. Shipping costs would be higher. Americans haven't had to carry yet another coin in their pocket. We already have 4 normally used coins, not counting half dollars which nobody uses. If you ever wandered around with a bunch of pesos in your pocket, you would know what I mean. Dope dealers would have to hire extra help, just to carry their cash around. The US government savings of $522 million works out to about $1.74 to me. I would rather pay that to not have a big fat pocket full of coins.

Banks whining about home equity defaults

I read these financial articles every day and there are always a few that piss me off. Today's article is from the NY Times concerning the high default rate on home equity loans. Unfortunately, the NY Times doesn't allow comments on their site (I guess they don't want other opinions) so here I go! When home equity loans are involved in a family's struggle to recover from this recession, they usually wind up being settled for 10 cents on the dollar or less. There are those quoted in the news article that act as if the homeowner intentionally set out to screw the bank by getting the loan. One real estate lawyer implied that it was "immoral" to bail on the loan. While there are people who should have known better than to over-extend themselves, most were banking on their house continuing to increase in value. The banks they borrowed from were also banking on this. It's obvious now that this was flawed logic. Unfortunately, when the market tanked, the borrower was the one on the hook. Defaulting is simply putting the lender on the hook, too. Since it is the banking industry's lending practices that got us in this mess to start with, they deserve being on the hook. The banks were also fully aware that in a foreclosure, the primary lender comes first, with the second lender getting crumbs at best. As for the homeowner, a bankruptcy screws your credit for 7 years, but if you are in a financial bind to start with, you don't need credit anyway. Cash and a debit card can get you a long way. I just get sick and tired of all of the news articles and stories that trash the borrower. I always root for the underdog! The borrowers don't have a voice at all. Writing your politician of choice does no good at all. They are too busy trying to see whose ass they can kiss or what perk they can get. Read the NY Times article here.

How the super-rich think

I read this news article the other day that discussed a conference call Bill Gates and Warren Buffett had with other billionaires about giving away their wealth. Apparently, Gates and Buffett are saying they will give away at least 1/2 of their money before they die, and they want others to do the same. Why do you suppose they are doing this? Look at Buffett. He's like 80 years old and worth $62 billion net! Now, he decides to give some money away? Why didn't he give some away years ago? For us common folk, $1 million a year would keep us in high cotton. What can you do with $62 billion when you're 80? Not much! Bill Gates is just as obnoxious. He's worth $58 billion. He does do some charity work (all highly publicized), but I'm not sure how much good it does to give hand-cranked netbooks to natives in Rwanda. I heard he gives to American high schools but all I see are a bunch of computers running Windows badly. Multiply the problems you have with Windows Anything by 50 computers in a classroom. I wouldn't want to be that teacher! These guys are scared to give all their money away. That's why they only pledged 1/2 of it. They don't want to end up like the rest of us. When my bank balance drops below $80k, I start sweating! (not really! (alternate comment ) I wish!) My point is, give it all away, or at least 90% of it. They can survive on what's left. New York City Mayor Micheal Bloomberg actually said that it didn't make sense to leave it all to his kids because it might screw their lives up being members of the "lucky sperm club". I know a couple of members of that type of club and know that, if their parents were alive to see how they conduct business and treat people now, they would kick'em square in the ass!