I am reducing the Curious Cat Investing, Economics and Personal Finance Carnival to being published once each month. If I get some decent contributors that want to host it I would consider going back to twice a month.
- A controlled break-up of the euro would be hugely risky and expensive – “Estimating the price of a “Grexit” is guesswork, but Germany’s share might reach €110 billion of this, about 4% of the country’s GDP.”
- Personal Finance: Minimal Budgeting by John Hunter – “I just leave that in my checking account and what is in checking is what I have to spend… I couldn’t spend any more, I didn’t have it. If I were to go over (I never did), but if I were to have (say my credit card bill exceeded my checking account balance), I would have had to reduce my cash the next month.”
- Are Dividend Stocks Overvalued? Four Reasonable Blue-Chips to Consider by Matt Alden – “Although I do think the market as a whole is modestly expensive (via the Shiller P/E for an overview as well as inspection of individual securities), dividend stocks in general do not appear to be at dangerous valuations.” [Aflac has been on my almost buy list for over a year – John]
- Actually, The U.S. Lost 1.2 Million Jobs Last Month by Jacob Goldstein – “Everyone (including us) is saying this morning that the U.S. economy gained 163,000 jobs last month. Strictly speaking, this is a lie. In fact, the U.S. economy actually lost 1.2 million jobs last month. There were 134.1 million jobs in June, and 132.9 million jobs in July… the government releases “seasonally adjusted” jobs numbers every month. The basic idea is to correct for these predictable fluctuations.”
- Current crisis exposes weakness in China’s economic system by Jim Jubak – “The current obvious fakery is degrees of magnitude different from the usual distortion in Chinese economic data. So, for example, the Public Safety Bureau has simply stopped publishing data on new car registrations because the numbers show such a big drop in new car sales that they can’t simply be fudged. Data on the steel industry has been revised and revised again because the government can’t come up with a methodology that disguises the drop in steel sales and yet isn’t completely unbelievable. And, of course, the government hasn’t published data on the number of vacant apartments in China—a reflection of the country’s real estate boom and bust—since 2008.”
- For the first time since 1998 more money leaves China than enters it – “more than 16% of China’s rich have already emigrated, or handed in immigration papers for another country, while 44% intend to do so soon. Over 85% are planning to send their children abroad for their education, and one-third own assets overseas.”
More and more the ability to continue to delay the huge problems continued from the credit crisis (too big to fail fakery plus the decades of the USA and Europe living beyond their means) seems to be coming to an end. And onto that the problems in China and it is difficult to see how we avoid big problems. It is amazing the bad behavior in the USA and Europe has been only as bad as it has the last 4 years – but there is a very good chance that will not continue. China is not looking like it can be a savior. Certainly India is not doing much right recently. Japan continues to struggle. 2013 looks very tough economically. Eventually the central bank games of given essentially huge cash payments to bankers will cause people to lose faith in those currencies (frankly I can’t understand why they haven’t already). When that happens we will see some real problems.