Saturday, April 4, 2009, 11:48 am, by cmartenson

In a completely expected move, politicians from around the world gathered and made the decision to spend a lot of money that they didn’t have and which doesn’t exist (yet).

I am referring to the recent G20 meeting, where the global crisis was the main topic. As you may know from my past writings, I hold it as a near dead-certainty that national politicians can be counted upon to spend instead of cut and to print instead of tax. It’s just natural to want to take the path of least resistance.

If local politicians had a printing press, they’d print, too. But they don’t, and so they hike fees and taxes on things like roads, gasoline, fishing licenses, and building permits when things get tight.

Printing money out of thin air is inflationary and unfair. It steals from savers

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a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://3.bp.blogspot.com/_7ZckZ-8naz0/STsVezoq_wI/AAAAAAAACPA/zjNpt1S7-l0/s1600-h/Fix+it.JPG"img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 400px; height: 340px;" src="http://3.bp.blogspot.com/_7ZckZ-8naz0/STsVezoq_wI/AAAAAAAACPA/zjNpt1S7-l0/s400/Fix+it.JPG" alt="" id="BLOGGER_PHOTO_ID_5276835007395725058" border="0" //aThere are a handful of world class investors whom I will go out of my way to see, hear or read. One of these heavyweights is of course Oscar Rogers. I have not seen anything from him in a while, a style="color: rgb(0, 0, 153);" href="http://www.imdb.com/video/hulu/vi845873177/"this link/a is from late October and I believe is his latest public commentary.br /br /In that clip he gives an impassioned plea for them to span style="font-style: italic;"fix it/span.br /br /I think Oscar might be on the verge of throwing in the towel despite a style="color: rgb(0, 0, 153);" href="http://www.nytimes.com/2008/12/07/business/yourmoney/07fund.html?_r=1amp;ref=business"this article from the NY Times/a saying that diversification does still work and that investors should not give up on it.br /br /The idea was simply that in a short term, panicked ...

In my usual weekend reading routine I came across this article in the NY Times profiling the plight of several Icelanders including a coffee house owner in Iceland trying to keep her business, Kaffitar, afloat.One problem Kaffitar is having is getting suppliers to conduct business with it. At some point in the process someone has to buy Icelandic kronas to complete the transaction and no one is willing to do that.Another problem is that Kaffitar borrowed money in euros for expansion. The monthly payment used to be ISK 120 million but now it is ISK 200 million after the collapse of the currency. What would a 66% increase in your mortgage do to you? This is happening to many businesses in Iceland.When Joellyn and I were in Reykjavik in July 2006 there was a Kaffitar a couple ...

The U.S. government yesterday (Tuesday) announced plans to invest $250 billion, more than a third of the $700 billion congressional bailout allotment, into nine of America’s largest banks in an effort to bolster confidence in the financial system. Similar to steps taken by European governments earlier this week, the government will guarantee new debt and take equity stakes in the participating banks.

The U.S. government yesterday (Tuesday) announced plans to invest $250 billion, more than a third of the $700 billion congressional bailout allotment, into nine of America’s largest banks in an effort to bolster confidence in the financial system. Similar to steps taken by European governments earlier this week, the government will guarantee new debt and take equity stakes in the participating banks.

The U.S. government yesterday (Tuesday) announced plans to invest $250 billion, more than a third of the $700 billion congressional bailout allotment, into nine of America’s largest banks in an effort to bolster confidence in the financial system. Similar to steps taken by European governments earlier this week, the government will guarantee new debt and take equity stakes in the participating banks. "Government owning a stake in any private U.S. company is objectionable to most Americans - me included," U.S. Treasury Secretary Henry Paulson said announcing his decision to effectively nationalize the nation’s banking sector. “Yet, the alternative of leaving businesses and consumers without access to financing is totally unacceptable.” A government investment of $250 billion amounts to about 25% to 30% of the market capitalization for publicly traded banks, Rajiv Sobti, chief investment officer at Nomura Global Alpha, ...

We've discussed this many times in the past [Jan 21: A Tour Through the Middle East] and as I wrote in January While we wring our collective hands about how the infrastructure companies are going to lose all their business as crude drops from $100 to $75, and projects will be cancelled due to their rich customers actually giving a rat's behind if crude is $100 or $75 let's take a look at reality. I noticed a story in the NY Times this weekend on Saudi Arabia - so I'd like to overlay that with just a snapshot of what is going on in some of the other countries in this part of the world - the Kuwaits, the Oman's, the Abu Dhabi's, the Qatar's.... ... because perhaps I think most of us still are very inward looking as Americans and do not realize ...

The NY Times came up with a very interesting way to look at consumer spending. In the long run, consumer spending is a function of consumer income. Though since early 2000 it did not appear to be the case as consumers financed their spending by borrowing against their future income. If you believe that consumer spending is likely to stagnate but the cost of food, healthcare and energy is likely to increase (it did in 2007), then something has got to give.

In other words the income pie is not growing; some slices are expanding at the expense of “X.” And that is the question that this NY Times diagram may help to answer: at the expense of what?

Several categories come to mind right away: new car sales – yes we will be driving older cars (maybe we should look to …