EconomyEinstein

The modern recycling movement can be traced to two events that happened in the late 1980’s. The first, in 1987, involved a barge named Mobro 4000 that attempted to dock in Morehead City, North Carolina and dump its 3,100 tons of waste that originated in Islip, New York. The garbage was ultimately carried back to Brooklyn, burned and the ashes buried in Islip. The other event, in 1989, was the publication of a paper by Jay Winston Porter, a former Environmental Protection Agency administrator. The paper was titled “The Solid Waste Dilemma: an Agenda for Action.” In the paper Mr. Porter stated that recycling was “absolutely vital”. Local governments took notice and since the late 1980’s, the growth of mandatory recycling programs has reached nearly 10,000 communities in the United States today. Sadly, recycling in America is a colossal waste of money.

Continue reading "The Road to Hell is Paved with the Good Intentions of Recycling" »

Leave it to Wall Street to make money in new and imaginative ways. Most people, when they think of Wall Street, think about the usual way of making money: buy low, sell high. That relies on a very simple and understandable concept: buy something real like stock, which is a real percentage of ownership in a real company, and when the value goes up, sell out. Derivatives are trickier.

Continue reading "The Global Economic Collapse Part 3: Questionable Derivatives" »

When we talk about who the United States owes, who are we talking about exactly? Here's the list of the 15 holders of U.S. debt.

Continue reading "Who does the U.S. owe anyway?" »

Moody's plans to publish "Bottom Rung" today which is the list of companies it says has a high likelihood of defaulting on debt. The 30 biggest companies can be accessed here. Take it with a grain of salt, Moody's also rated CDOs as AAA investments too.

It was uncharted territory: Fannie Mae and Freddie Mac (GSEs) used to be the only game in town for mortgage originators and their strict guidelines limited the number of people able to get mortgages. After the GSEs' accounting scandals, suddenly mortgage originators both new and old found someone to replace the GSEs deep pockets: Wall Street. If you're a mortgage originator you obviously want to make more loans and now it was easier than ever. Combining an unregulated Wall Street with a bunch of new money begat a new and experimental wave of securitization. The greed stretched from unqualified borrowers all the way to the international finance arena.

Continue reading "The Global Economic Collapse Part 2: The Money Chain" »

No doubt if you've been watching the news you've noticed American International Group (AIG). Taxpayers have pumped about 170 billion dollars into AIG, and you probably are wondering why.

Continue reading "AIG: Socialized Risk, Private Gain" »

How did the global economic collapse occur? It built up over a few years and involved a perfect storm of greed, lack of oversight and the creation of new derivatives. Circulation of money is what makes the economy work. That circulation is credit.

Continue reading "The Global Economic Collapse Part 1: The Beginning" »

Politicians constantly push trade tariffs and exchange rate controls, both of which are targeted at, and affect, international trade. The effect of these controls ultimately resound through domestic economies. Is NX < 0 a bad thing? Not necessarily.

Continue reading "An Analysis of Surplus and Deficit" »

In the equation constructing the GDP ( Y = C + I + G + NX ), the "NX" stands for net exports. When domestically produced products are sold in other countries, those products are classed as exports. When a consumer in the U.S. buys a product produced in another country, those products are classed as imports. To obtain the net export number you merely total up exports, total up imports and subtract your import total from your export total. "NX" is that figure.

Continue reading "Deconstructing the GDP - Net Exports" »

In the equation constructing the GDP ( Y = C + I + G + NX ), the "G" stands for government. A huge amount of GDP is spent by government, even more in Europe!

Continue reading "Deconstructing the GDP - Government" »