patrick.net

Access to healthcare is very important. Health insurance is financing for healthcare, not access. However, our healthcare system is built around the use of insurance, with preferential negotiated rates for insurers. So if you pay on your own you pay far more for the same services.

So the woman with advanced skills in robotics cannot get health insurance from the employers in that field? I thought engineering type employers would provide such benefits. And would she not make more money in her robotics field? Enough more to pay for her own health insurance? I realize that health insurance is expensive. But a person with an advanced degree in robotics should have significantly greater earnings potential than being a dispatcher.

Eliza,

i know i know. There are going to be some examples of how wonderful the state health care is run...

I could go into a rant about how at this point it's just keeping old people alive who are using even more state resources... but it's Christmas. So I'll leave it alone.

The point remains though... EVERYONE CANNOT HAVE EVERYTHING. I'm sure you can also make an argument that buying a sports car for every person in CA would make us all more productive. But the state is already bankrupt yo.

Get it? CA IS FUCKING BANKRUPT.
We can't afford it.

I get the feeling in 2009 alot of people are in for a harsh awakening.

Oh wait! We can just raise state taxes to 50%, and then we can all have health care! Why didn't we think of this sooner?!?

frank,

If you want to get into the business of quoting authorities and authority-figures (not always the same thing), here is one (Barry Ritholz) that disagrees with yours.

http://www.ritholtz.com/blog/2008/12/what-does-regulation-regulate/

Oh wait! We can just raise state taxes to 50%, and then we can all have health care! Why didn’t we think of this sooner?!?

You mean the biggest exodus since the second book of Moses? :)

Wow, I must say this really sums it up nicely:
Even the former investment banks are still hiring for certain jobs, he said. For example, one student [quant] has been hired by Morgan Stanley to price and assess counterparty risk, something that was "hardly on anyone's radar last year." WTF? I guess they were to busy designing exotic securitization schemes to be bothered...

TOB,

thanks for the lesson. They don't teach debate nor latin where I went to school, Sometimes I think that was an advantage.

In fact, I wonder if the US of A would be a much better place if children did not learn in school that the purpose of debate is for someone to win it, rather than using it as a process for finding or teaching the correct answer.

Same thing goes for "competition". It has become all about winning at any cost, whereas it really should be about being BEST (best product, best results, etc). Unfortunately, people do not care about truly being best, they only care about "winning".

But I digress...

Happy Christmas, Hannukah and all that,...

In fact, I wonder if the US of A would be a much better place if children did not learn in school that the purpose of debate is for someone to win it, rather than using it as a process for finding or teaching the correct answer.

Huh? The purpose of a debate is not about winning nor about finding the correct answer. It is about making a point.

There is no such thing as a "correct" answer. And "winning" is worthless without gains.

Merry Christmas. God bless America.

MST,

>>Why are They (Demopubs and Remocrats) letting illegal immigration happen?” ‘Cause they need new pyramid base, of course!

Right on target,. Could not agree more..

In fact, the US is the biggest pyramid scheme in history.

The problem with this country is that every 2nd generation Tom, Dick and Harriet have only one aspiration, which is to sit on their fat ass and own real estate that they rent out to new immigrants, who also do all the real work.

In the big scheme of things, why do economies always have to grow? Answer: To keep the pyramid scheme going.

And why do we need business cycles? Because exponential growth cannot be sustained and we need to reset and re-flatten the (bottom of the) pyramid every few years.

Peter P,

You may have made my point :-)

Merry Christmas.

why do economies always have to grow?

Yeah, we need to come up with a new economics on this board.

I am still not clear what is wrong with pay-as-you-go finiancing like social security, except that it doesn't work with a declining population. Does the Untied States have a declining population? It is like just-in-time production, but only with money.

Social security is one big ponzi scheme.

I am against free health care for anyone over 70. Life beyond 70 is a luxury and if old people want to live, they better pay up.

How about this fair plan:

Anyone can withdraw from his retirement account at any time. However, from that point on, free health care, including critical emergency care, will cease to be free.

I don't think I am saying that the state needs to pay for health care or health insurance for everyone. But government is in a good position to broker a more reasonable arrangement, even if people had to pay in and pay copays and all of that. Because the current system is messed up, inefficient, expensive, and unkind.

The biggest problem I see is the preexisting condition bit. Take, for example, cancer. That tends to be a one-in-three proposition, and it is survivable, and it does not always strike the old and non-productive. And you can't always blame people for getting cancer--sure, it will probably get you if you smoke two packs a day, but it might still get you if you never smoke, sleep well at night, go to the gym every day, and eat organic food. But try getting solo health insurance after that diagnosis. Nope, if you get really sick with anything just once, you will definitely have to work for an employer who provides group insurance for the rest of your life, or you will have to find a way to become wildly wealthy and pay your own way--because paying your own way will cost a lot more. This restriction on access to insurance, which becomes a restriction on access to healthcare, is bad for business insofar as it prevents workers from moving around freely and starting new enterprises.

As for the robotics chick, her tiny start-up does not provide group health insurance, and she has a pre-existing condition, so solo insurance would not happen for her. So the start-up gig has to be a side gig.

Eliza,

Right on. Good analysis.

The bond ratings agencies (Moody, S&P, etc) are exactly the form of private guard that we are talking about

Quite the contrary! The bond rating agencies are a government sponsored cartel and you’re right about how miserably they failed, proving my point.

We certainly do not need specialized bond rating agencies. Investors should be responsible for the research. So much for public good.

Rating agencies are over-rated. Haven't we seen enough to know that supposedly "safe" investments (Fanron, AAA MBS, Madoff, etc.) are the most prone to failures?

Perhaps prudent speculation will turn out the be the only safe strategy.

Not investment advice

Big Madoff Investor Found Dead
French Financier in Apparent Suicide in New York Office; Fund Lost $1.5

The co-founder of an investment advisory firm that lost $1.5 billion in the Madoff scandal was found dead Tuesday in an apparent suicide in his Manhattan office, police said.

Thierry Magon de La Villehuchet, 65 years old, was pronounced dead about 8 a.m. New York City police said they believe the death to be a suicide but were awaiting results of an autopsy to be completed Wednesday.

Workers discovered Mr. de La Villehuchet's body about 7:30 Tuesday morning at the Madison Avenue offices of Access International Advisors, police said. Mr. de La Villehuchet had lacerations on his arms, and police

NJ state senator loses $1.3M life savings
Wednesday December 24, 11:03 am ET

New Jersey state senator loses $1.3 million life savings in Madoff scheme

TRENTON, N.J. (AP) -- New Jersey Sen. Loretta Weinberg's nest egg had grown to about $1.3 million before investments with disgraced Wall Street investor Bernard Madoff wiped her out.

The 73-year-old grandmother believed she was financially secure until recently, when an accountant phoned a relative to say the Weinberg family's investments -- including the senator's and those of many in her family -- were now worth nothing.

The Weinbergs, like New Jersey Sen. Frank Lautenberg's charitable foundation and scores of others, were victims of a multibillion-dollar Ponzi scheme masterminded by Madoff

Why do Madoff investors all seem to have European-sounding names?

Wonder if we will see some sort of government bailout for Madoff "victims."

Let the Madoff victims eat cake. They made their investments on their own free will. They are now on their own. Financial Darwinism makes the world better.

L’Oreal Heiress Bettencourt Invested With Madoff (Update3)

Dec. 24 (Bloomberg) -- Liliane Bettencourt, the world’s wealthiest woman, entrusted part of her $22.9 billion fortune with Bernard Madoff through the fund manager found dead in New York yesterday, two people familiar with the matter said.

The 86-year-old daughter of L’Oreal SA founder Eugene Schueller was the first investor in a fund managed by Access International Advisors, the people said, speaking on condition of anonymity because her investment isn’t public. The body of Access co-founder Thierry Magon de La Villehuchet, 65, was found in his Madison Avenue office yesterday. Police said he probably killed himself.

Bettencourt, a Parisian, joins wealthy individuals from around the world, including Spanish billionaire Alicia Koplowitz, U.S. moviemaker Steven Spielberg and Nobel laureate Elie Wiesel, among victims of what Madoff, 70, told investigators was a $50 billion Ponzi scheme.

“More high-profile names who have been victimized by Madoff will start to become known now,” said Ron Geffner, who represents hedge funds at the New York-based law firm Sadis & Goldberg LLP. “There’s a strong sense of anguish, fear and distrust.”

30 Percent Stake

Bettencourt, the only child of Schueller, holds a 30 percent stake in Paris-based L’Oreal, the world’s largest cosmetics maker, according to Bloomberg data. She inherited L’Oreal in 1957 when her father died and holds a seat on its board.

Bettencourt rarely speaks to the media. She gave her first interview in 20 years this month to the weekly Figaro Magazine.

Access, which oversaw $3 billion, raised money mainly from wealthy European investors.

Access said in a Dec. 12 letter to clients that funds including its LUXALPHA SICAV-American Selection invested solely with Madoff’s eponymous investment firm. The fund had $1.4 billion in assets as of Nov. 17, according to data compiled by Bloomberg.

Access says it carries out “extensive” due diligence on the funds to which it allocates money, a process that can take as long as six months and cost $100,000. It also hires private investigators to run “extensive background checks” on fund managers, including searches on professional credentials, regulatory filings and bankruptcy, according to marketing documents dated September.

Suicide

New York police are working on the assumption that de La Villehuchet’s death was a suicide, Commissioner Raymond Kelly said yesterday. The fund manager was found “with his feet propped up on his desk, a trash pail nearby to collect blood,” and no sign of a second person, Kelly said in the interview.

He had cuts made by a box-cutter in the area of his biceps and his wrist, and pills were found nearby, Kelly said at a news conference. No suicide note was found. His body was found at his desk early yesterday morning by a security guard who had been called by an employee unable to enter the office, Kelly said.

An autopsy was conducted today, New York City Medical Examiner spokeswoman Ellen Borakove said in an interview. The results won’t be known until a toxicology report is returned next week, she said.

De La Villehuchet founded Access in 1994 with Patrick Littaye. One of the firm’s partners was Philippe Junot, according to the marketing documents. Junot is the former husband of Princess Caroline of Monaco. Prince Michel of Yugoslavia is an investor relations executive, according to the documents.

International Background

Prior to Access, de La Villehuchet was chairman and CEO of Credit Lyonnais Securities USA, the U.S. investment banking arm of the French bank. He had joined Credit Lyonnais in 1987, and before that ran Interfinance, an international brokerage firm specializing in French, Belgian and Italian stock markets that he founded in 1983. He worked at Banque Paribas from 1970 to 1983.

Access, which had 26 employees, said in a statement on Dec. 12 it was working with lawyers to assess its exposure to Madoff. UBS AG, LUXALPHA’s administrator until this year, is no longer involved with it, said Karina Byrne, a UBS spokeswoman.

De La Villehuchet’s death comes as lawsuits mount in connection with investors victimized by Madoff. Fairfield Greenwich Group, a hedge-fund firm that had $7.5 billion invested with Madoff, has been sued for allegedly failing to protect its clients’ assets. Madoff was arrested on Dec. 11 and is now under house arrest at his apartment in New York.

Very amusing sarcasm on another blog:

“Funny, there is no Fannie Mae, Freddie Mac, or CRA in the UK. However can we explain their boom, bust and credit collapse?”

Three valid explanations:

1) Bill Clinton - attended Cambridge.
2) Jimmy Carter - spoke English.
3) Barney Frank. - lived.

http://www.ritholtz.com/blog/2008/12/bank-of-england-allowed-crazy-borrowing/

4) LABOUR PARTY!!!

No laws, no institutions, no strawmen needed? Just "labour party"?

I suppose the analysis is par for the course...

No strawmen needed Just strawberries. Happy holidays!

Headset said: 'Wonder if we will see some sort of government bailout for Madoff “victims.” '

With that list of who's who victims - pretty much count on it. You and I (of the taxpayer/slave subculture) will foot the bill. I'm betting they'll get the meat hooks into bailout money using creatively structured brokerage coverage, nominally through the SIPC. The SIPC's empty Mr. Paulson, fill'er up! Another round on the house!

1 car family: Deflationary psychology

We have been a One car family of four adults for 2 months now. We had 2 cars with about 75,000 miles on them and I sold them both, then bought a subcompact brand new for cash at a deeply discounted price. Like many families, our income has not risen while major expenses like property taxes, insurance, etc have increased. Consolidating into one car has been less painful than I anticipated and we are managing well. I suspect more families are doing with less now as the fear of economic disaster looms. Certainly car sales indicate that more families are doing with keeping aging cars or perhaps some are reducing the number of cars they own, sometimes involuntarily.

We do not have to have only one car. I can easily buy another car for cash, but am waiting for a 'rip their lungs out' desperation sale price later in 2009. In the past I would not have considered this patient an approach and just hunted for a new car to buy immediately after selling my old car. Now, I smell blood in the water and fully expect the deflationary impact of this economy to result in capitulation car prices. Perhaps, I will have to wait 6 to 9 months until The Crisis in the Fall of 2009 for the Big 3 auto makers to miserably fail and then buy a car when they go bankrupt.

I am a good example of Deflationary psychology: putting off purchases in the expection of lower prices in the future.

I can easily buy another car for cash, but am waiting for a ‘rip their lungs out’ desperation sale price later in 2009.

Ain't it grand? About time cash was king.

Besides, a large part of this deflation is really a correction of prices that were inflated by easy credit. The current reduction of easy credit is allowing prices to settle to a more natural level.

I have given up the car also. Too expensive, with insurance and whatnot. I am aiming for the big items in my balance sheet. It sure feels good to save all of that money, since I thought I had cut as much as was possible. We still have two cars left. Cars are my biggest expense after housing. Getting rid of one car put money in the bank, and cut that expense by one third.

justme Says:
December 25th, 2008 at 7:17 am
Very amusing sarcasm on another blog:

1) Bill Clinton - attended Cambridge.
2) Jimmy Carter - spoke English.
3) Barney Frank. - lived.

True, and there have been booms in NZ, Oz, Netherlands, Eire, Spain, etc, all without FM-type institutions. The biggest conspiracy theory of all tho says that FM and FM and the Fed lowering interest rates effectively created tons of credit and liquidity out of thin air which went around the world, stimulating lending and liberalised credit in all these countries. Also, Wall St CDOs and MBSs etc were directly sold into a lot of countries as investment vehicles, but this would not influence national banks to lend too much to domestic home purchasers. What then of this theory that FM, FM, Wall St and the US Fed indirectly created the world-wide housing boom and bust?

Merry Xmas and a Happy New Year to all patrick.netters...

I understand SF Bay Area prices are down 45% this year????

4) LABOUR PARTY!!!

Very funny. The irony is that there were 12 years of conservative, laissez-faire 'Liberal Party' rule in Oz during the whole boom cycle, and Labour came in just as the bust commenced. They luckily have a $40 bn Federal surplus mainly from mining proceeds that they are desperately using to pump-prime the economy a la John Maynard Keynes' prescription, but the surplus will probably run out before the recession is over. It's currently being spent on writing Xmas cheques to pensioners and anyone with children ($1k per), pumping up house prices by offering $21K to all first home buyers, and providing 'liquidity' to banks. And supposedly a massive infrastructure-building, job-creating Keynesian-style nation-building exercise -- new roads, rail, fibre optic infrastructure, whatever. Anyway, they inherited a poisoned chalice from the previous 'business-oriented' govt (who sat on their hands and did nothing but slash services) but who at least scrimped and saved a reasonable surplus, mostly from the fluke of a mining boom...

FuzzyMath Says:
December 19th, 2008 at 12:32 pm
do you ever get concerned that capitalism itself is a form of a ponzi scheme? I haven’t put too much philosophical thought into it, but something about it nags at me. Namely, absent growth, the system seems to break down entirely.

Also, what growth is real? As the rug gets pulled out of the last 8 years, we are seeing alot of castles made of sand. How far back does this fake growth go I wonder? The early 80’s? 60’s? WWII?

See Steve Keen's site, 'Debt(de)flation' for an interesting economic analysis of the role of lending in creating artificial 'growth' over several decades -- http://www.debtdeflation.com/blogs/ -- current long article about Ponzi schemes in particular, but I'm thinking about his article titled something like '40 years of increasing debt' -- debt started hiking in the late 60s, leading to the early 70s crash and recession, for instance.

As for GDP growth, I dunno, a lot of it seems to come from digging new stuff out of the ground, technological breakthroughs and efficiencies, and just plain old inflation...or debtflation...

DS,

We can agree that the Federal Reserve had a large and significant role, also internationally by spreading the gospel and indeed being the enabler of other central banks setting of low interest rates around the world.

Can you believe this!

http://www.tampabay.com/news/politics/article950391.ece

# Different Sean Says:
I understand SF Bay Area prices are down 45% this year????

Only the median. Last year, the low end was stalled and mostly middle and high end properties moved, so the median in Nov 2007 was artificially high. This year seems to be the reverse - foreclosure sales are fattening up the low end (at lower distress pricing) while the high end is stalled because there are not enough buyers to make transactions happen at the ridiculous asking prices. As a result, recorded sales in Nov 2008 are mostly low-end - which when compared with the Nov 2007 median seems like a huge drop.

I think the YOY comparisons will flatten out from this extreme in a few months - giving realtwhores and that joker at Dataqueef a chance to claim that the market is bottoming out...

Also, In the areas where most of us would actually _want_ to buy, wishing prices are down only about 15%. The 'fortress' has cracked, most people I meet are silently worried, and the fools who chanted 'it won't happen in crappertino' have mostly shut the fuck up - but panic is yet to take hold.

SP,

Here's to 2009 !

>> The ‘fortress’ has cracked, most people I meet are silently worried, and the fools who chanted ‘it won’t happen in crappertino’ have mostly shut the fuck up - but panic is yet to take hold.

I wish utter distress to these people in 2009...