I think that's just the problem. The donations are already changing your site.

You're a writer: you know better than anyone that writing has to be what it needs to be, what it can best be, not what the public desires. Why do people read or go to movies? They most want the joy of expression, emotion, even by proxy. But the difference in the papers or in other blogs is that they do not have the joy of personal expression, either because they must consider money or because the originator doesn't have it in abundance to give. They are worried of giving, not free. ...Free.

You'll catch the most of us within 30 days. Blogging is different in that it's two-way bond. It's an extended circle of friends where one day, on a lark, one of the friends asked for money he didn't expect. Among friends, that is fine as a one-time or occasional thing, and entertaining for us to surprise you, but if it is regular it becomes a business relationship, which is different. Think of it like trading. You hit something that works, but it won't work all the time. It's like you asked for a hit to support your habit. Now go home and forget this ever happened. :)

A donation tab on the sidebar is great, where people can run into it from time to time and surprise them. If they are not surprised, it will be like a hit-up, a public-radio blogathon and be resisted. As your readership grows, it may even have modest income the way shareware does. But the writing is good because it is pure--did Hemingway say that? I'm not going to remember what book that's in. It is pure because it purely entertains you only. Changing that would change the contract, most especially to yourself, and change the blog, the atmosphere, and your life.

Here's a diet 'study' for you:

For a few years my stepfather resided alongside a couple in their mid-90s. Because the two were somewhat feeble, Ed routinely pulled their trash can to the sidewalk to await pickup by Waste Management. Ed also took note of the weekly contents: generally eight soup cans and three empty wine bottles...
Now that's a 'study' with the ring of truth.

If you are interested in another, here is one from Richard H. Dana's Two Years Before the Mast: A Personal Narrative of Life at Sea . Dana was working to stuff the hold of a single ship with 45,000 cattle hides. The memory is from 1836 at San Diego, California, well before beef became a staple of the American table.

"During all this time,--which would have startled Dr.Graham--we lived upon almost nothing but fresh beef; fried beef steaks, three times a day,--morning, noon, and night. At morning and night we had a quart of tea to each man; and an allowance of about a pound of hard bread a day; but our chief article of food was the beef. A mess, consisting of six men, had a large wooden kid piled up with beefsteaks, cut thick, and fried in fat, with the grease poured over them. Round this we sat, attacking it with our jack-knives and teeth, and with the appetite of young lions, and sent back an empty kid to the galley. This was done three times a day.

How many pounds each man ate in a day, I will not attempt to compute. A whole bullock (we ate liver and all) lasted us but four days. Such devouring of flesh, I will venture to say, was seldom known before. What one man ate in a day, over a hearty man's allowance, would make a Russian's heart leap into his mouth. Indeed, during all the time we were upon the coast, our principal food was fresh beef, and every man had perfect health; but this was a time of especial devouring;and what we should have done without meat, I cannot tell. Once or twice, when our bullocks failed and we were obliged to make a meal upon dry bread and water, it seemed like feeding upon shavings.

Light and dry, feeling unsatisfied, and, at the same time, full, we were glad to see four quarters of a bullock, just killed, swinging from the fore-top. Whatever theories may be started by sedentary men, certainly no men could have gone through more hard work and exposure for sixteen months in more perfect health, and without ailings and failings, than our ship's crew, let them have lived upon Hygeia's own baking and dressing."

Two Years Before the Mast (gutenberg.org)

Congratulations! You and Nurse Dorothy have produced the most concise explanation I have seen regarding one of the major problems that contributes to our screwed-up health system in this country. The ideas you two have expressed have been in my mind in disorganized form for quite some time. You have organized them quite nicely for me. Thank you.

I'm going to risk sounding as though I am in a self-absorbed “me-bubble” as I go through this. I really am not. This summer (assuming that I have money left over after tax season) vacation is going to be a 700 mile bicycle tour through three states. This fall I will turn 60. Different? Yes. Crazy? Maybe. Impossible to do? Not at all. The reason is exactly what you addressed: self-responsibility. At this point in my life it's becoming obvious to me that it is payback time for all the responsible lifestyle choices I have made over the years of my adult life.

I will admit that I seem to have gotten good genetics from my maternal grandfather. When he was 80, he spent part of the summer digging by hand with a pick and shovel a hole big enough to set a septic tank in. (On the downside, if I am correct about this, I will probably spend the last years of my life dealing with failing eyesight and blindness, but that’s a story for another time.)

I've never smoked. I was asthmatic as a kid. Two cigarettes, and I can't breathe. I quickly decided that the pleasures of being able to breathe easily far outweighed any pleasures I might get from smoking. An occasional beer or a half a glass of wine before dinner is it.

I was a finicky eater when I was growing up, but I learned to broaden my diet in my early twenties. I can still tell you the exact circumstances when I was forced to confront broccoli, which I "knew" I hated even though I had never eaten it, and discovered that it actually TASTED GOOD! After that epiphany, I decided that there might be other things for which the same was true, so I started to experiment. I found out that it was true.

About the same time I decided to reform my diet. I had the intuitive good sense to realize I should change only one thing at a time. I cut down on meat, and increased vegetables and grains, cereals and pasta. At first I did this because it was supposed be healthful. I soon discovered that I simply felt better and had more inner vitality by eating this way.

A few years ago I discovered that I needed to downsize portions. I've always had a sloppy metabolism, so I could eat mostly as much as I wanted. (Good genetics again.) Over the years I had slowly put on about 20 pounds which I could get away with carrying. I would lose some of it over the summer biking, but I would put it back on over the winter. (I live in the Northeast where you can't ride in the winter, and I hate stationary bicycles.) Over a summer of riding I apparently cut down on the amount of food I was eating by probably 20% without realizing it. Toward the end of the winter I realized I hadn't gained the weight back and figured out why. So I repeated the same practice the following summer and winter, and the summer after that. I am now back to basically the same waist size I had my 20s.

This isn't rocket science, just common sense. I figured out how much food it would take to put 500-800 calories on the plate for each meal of the day. If I eat a bigger meal at noon, I eat a smaller meal at supper. On a day I exercise I eat more than on a day I do not.

And lastly there is the matter of exercise. You simply have to do it. It has to be important enough to you to do it in order to stay healthy that you will make the time for it. You have to find something that you enjoy. It took me a long time to discover biking. For what ever reason, God in his infinite wisdom made me both totally unskilled at and totally unteachable for anything involving hand/eye coordination and a ball. First I tried running, but it was a duty. Eventually I decided to try bicycling. And that was love.

Do I have to think about all this as I do it? Yes, but not much -- about three seconds at any given time. Like many things in life, once you get in the habit of doing something you don't have to think very much about it at all. You just do it.

We have talked about this before and I think it is unfortunate that we don't talk more about how people are genetically very different. To say anything other than "we are all the same" is politically incorrect and will get you in trouble, but the truth is that we are really different and some people can get away with eating total crap and still look great and be healthy while others can eat nothing but small portions of good food and still look like crap and have health problems.

(I have not missed a single day of school or work due to illness since High School and the last time I spent the night in the hospital was back in '65 the night I was born).


I have friends of French descent in the Circle de l'Union Club in San Francisco (a.k.a. "The French Club") and the kids (as in "kids my age" in their 40s) with thin fit parents of French descent tend to be basically thin and fit no matter what they eat or what they do...

My Mom gets mad when I compare everything to cars, but there are a lot of similarities. You can make a Cadillac go a little faster and handle a little better with premium gas and better tires but it will never be able to catch a Lotus on the track, just like a 245 pound 6'4" German guy can get a little faster if he trains, eats well and buys some nice running shoes, but he will never be able to catch a typical 145 pound 5'11" Kenyan guy in a race.

Some people age well just like some cars age well. Odds are that an Italian movie star with Latin good looks will still attract the ladies 40 years after his last movie just like a 40-year old Ferrari will still get a lot of attention. The 60-year old Italian guy that drove a bread truck in his 20's will probably not age as well and will get about as much attention in his 60's as a 40-year old Fiat.

I remember seeing a photo of supermodel Paulina Porizkova with her Mom about 20 years ago and her 40-something Mom was better looking than most 18-22 year old Sorority girls. I just saw some promo photos for "Dancing with the Stars" and the 40-something Paulina is (like her Mom) better looking than most 18-22 year old Sorority girls today...

As more employers pay workers to quit smoking, take up exercise or lose weight, a growing number are under pressure to devise ways to reward another group of employees -- those that may already lead a healthy lifestyle.

The government recently finalized a thicket of rules governing what measures companies can take to induce workers to adopt healthier habits. The aim is to ensure that all workers are treated fairly in so-called wellness programs. As a result, employers who pay workers for giving up cigarettes, for instance, are increasingly offering non-smokers an alternative way to earn the same reward. Even nicotine addicts who can't quit are considered eligible for awards in some cases. This means that instead of being rewarded for success, many workers are earning extra cash or discounts on their health-insurance premiums just for participating in wellness programs regardless of whether they manage to change their habits.

One aim is to discourage the type of behavior Rockford Acromatic Products Co. encountered. The Illinois auto-parts maker used to offer $250 to employees who could stay smoke-free for several months. But some workers took up smoking just so they could then quit and qualify for the reward. The company stopped offering the incentive.

Let me say that I have been reading your blog for several months now (as well as a few others). Your site stands out mainly because of the high degree of thought and creativity of content that you provide on a daily basis.

I think that because of the great quality consistently on your site that you, Charles, are what the post-modern newspaper will someday become. The newspaper business is going to change and people are already turning to alternate sources (e.g. Drudge Report) to get their news fix. (emphasis added)

H.S.K. quotes from the following story:

A roomful of journalists could not resist asking about the prospects for newspaper stocks. Buffett and Munger were surprisingly bearish on newspapers, a major investment for Berkshire through its large stake in the Washington Post Co. and its outright ownership of the Buffalo News.

After saying that he and Munger are "newspaper addicts" and that "it's still an unusually good business," Buffett struck a somber note.

"The economics of newspapers are very, very close to certain to deteriorate over the next 10-20 years," he warned. "I see nothing that will turn around the erosion from both the circulation and advertising standpoints."

-Warren Buffett at shareholder meeting in 2004

As newspapers around the world tighten their belts, consolidate and merge, and invest less in their newsrooms, it will be up to sites like yours to provide the content that people simply cannot get anymore from their local paper. How many reporters out there, due to budgetary constraints and restricted deadlines and a headline's "sexiness" quota, currently just go to the internet for their story, punch it up a bit and submit? I'll bet that this is becoming more common every day.

What you do is already very similar to what they provide today, but in my opinion greatly superior. The byline on the site does not have to be yours, you have access through your readers to a vast sea of collective knowledge of the highest caliber. You can offer their insights (and you do, generously giving credit where due) and your site is that much better for it!

I was reading this today: Bubble Markets Inventory Tracking . This is one of the better Bubble Blogs, and I will ask them soon to add your site to the list of blog links they offer. While the LA Times was not technically wrong, more investigative research would have uncovered the real story, which would have made far more interesting reading.

Charles, I believe that there are many of us who already have quit watching the nightly news with its "if it bleeds, it leads" stories and its complex issues that they want to boil down into 3 minute and 22 second sound bites that are explosively delivered by "experts" who are nothing more that actors playing the pros vs cons. Somewhat entertaining, but that is not going to solve the complex issues that our country faces over the next 50 years.

I think you are an "early adopter" of the newspaper format of the future, and although things most days don't look so good, your blog is a bright spot in the clamoring din coming from the professional corporate news machine. (emphasis added)

I also wanted to let you know that I received a special offer for the Wall Street Journal for a year (with on-line access) for $99, and I would have taken them up on it a few years ago, but today, I would rather spend that on 3 or 4 of my favorite bloggers who truly do provide our country with a great service.

But I think the overall discourse, given the nature of the Internet and blogging, has this ripple effect that transcends the number of supporters who identify mainly with OfTwoMinds. Quality sites such as yours have a much greater impact than you might realize. So although some of the topics often are presented with highly technical analysis, the issues don't always lend themselves to simple solutions. Think derivatives. Zero discussion in the mainstream media, with the exception of the financial press, which appears to be exuberant cheerleaders one day and somber bears the next. And I am not saying the mainstream is without value. They just don't follow a logical progression sometimes.

I forget how I stumbled upon your blog, but I am very grateful that I did. The blog phenomena are fascinating for many reasons, with great content and the allure of an emerging new media type probably chief among them. But what made me hit your PayPal button in an instant (okay, a couple of seconds) was that I've come to regard you as a sort of friend that I like to listen to, that lubricates my own thinking. Usually the loudest or most emphatic guy at the pub gets the most attention, but I wish it was someone more like you: sensible, compassionate, insightful, classy, witty and human.

The 1979 film The China Syndrome took its name from the darkly humorous notion that a nuclear reactor meltdown in the U.S. would burn straight through the Earth to China.

March 21 – Bloomberg (Luo Jun / Simon Pritchard):

“Deng Yijun, a cargo freight agency manager in Shanghai, faced a dilemma last December. ‘I needed a car, but I didn’t want to use up my savings as the stock market was booming,’ she says. ‘So I used credit cards.’ Deng, 32, was eyeing a Ford Focus that cost about 200,000 yuan ($25,815), roughly equal to her savings. Maxing out three cards, she put 140,000 yuan on plastic and gained 56 days of interest-free credit….. Most of her remaining cash went into stocks… Deng is typical of Chinese who are using easy credit to fuel a stocks boom only briefly deflated last month by government threats to crack down on illegal lending. The willingness of banks to break the law to finance stock trades shows the blunt tools regulators wield as they try to manage China’s markets."
( source link-Prudent Bear)

"We like to buy shares, but when the nanny starts to give out investment tips, you know things have got a bit irrational," said Allan Chan, who like many Hong Kong residents likes to dabble in the market.

Signs of Hong Kong's feverish romance with stocks and shares abound, with an upsurge of small punters enrolling in investment workshops.

The abrupt turn in the markets last week was triggered by a 9% drop on the Shanghai stock market, its biggest fall in a decade. It should have been an insignificant event as Shanghai is a tiny, illiquid market, accounting for a mere 2% of global markets.

But the Chinese sneeze was contagious. Wall Street lost more than 500 points, the FTSE fell more than 300 points and Japan's Nikkei surrendered all the gains it had made since the turn of the year, falling back below 17,000 today.

Analysts said the fall in Shanghai had to be put into perspective of a 107% rise in the last 12 months and expressed surprise at its impact on the rest of the world.

"China's stock market right now is relatively small and not very globalised. So it's not possible for it to have such an impact," said Shang Fulin, chairman of the China Securities Regulatory Commission (CSRC).

Most central banks have invested them in U.S. securities, mostly Treasury bonds, but sometimes mortgage-backed securities as well. In recent years, these giant purchases have helped hold down interest rates that American home buyers pay for mortgages and the U.S. government pays to finance its budget deficits.

If central banks move out of such securities, U.S. interest rates could rise. But moving into equities, which tend to earn higher returns over the long term, poses risks to stock markets.

Chinese Communist Party officials have insisted that central bank officials be paid only civil-service wages, with the result that even fairly senior officials earn as little as $500 a month with minimal benefits.

(Albert interjects: I do not really know how wise it is to underpay people who have control over billions of dollars or any other currency. Wouldn't they sooner or later just rig trades so that could get paid some other way?)

"By contrast, the China Securities Regulatory Commission, the China Banking Regulatory Commission and the big state-owned banks are all permitted to pay wages that are competitive with the private sector, with salary and benefits totaling at least $1,000 a month and sometimes as high as $3,000. This has allowed them to lure managers from the central bank, as well as Chinese citizens returning from overseas with doctorate degrees in economics."

The People's Bank of China has now been given permission to pay wages closer to market levels, but the rest of the central bank still struggles to hire China's best and brightest, said Victor Shih, a China banking specialist at Northwestern University in Evanston, Illinois.

This is in response to the March 14th blog about managed care. In particular I would like to address the issue of preventive care. It is not really our lifestyle that needs to change but our culture. Culture is what drives lifestyle. As an example, being a nurse I meet many people from all walks of life, rich to poor. Whether poor or rich, both sides tend to work long hours, have high stress, lack exercise, and eat poorly all of which leads to chronic disease. Why, because whatever extra money Americans make is spent on stuff.

Our culture’s idea of a "good life" or "quality of life" is based on the perspective that the more "stuff" you have the better off you are. Who’s got the biggest house, latest fashion, nicest car, newest electronics, etc. In America we work our behinds off for a 5000 square foot house with granite counter tops, a flat screen television, and leather sofa where we can sit for hours eating fast food, getting fat and stressing out about how to pay next month’s mortgage, new car loan and credit card bills all the while popping anti-depressants like candy. That’s the American culture which drives our lifestyle.

As an example, I recently had a conversation with a single friend who makes a very good salary. We discussed the benefits of organic food and her response was that she would love to eat more organic foods but she can’t afford it. Meanwhile, she just traded in her 2-year old BMW for a new one "cause it’s so cool," purchased a 3500 sq. $400,000 home two years ago with a three year ARM coming due next year, and is thinking about having breast implants.

A culture based on high quality (not quantity) living would value financial stability via savings, leisurely enjoyment of high quality food with friends and family, any extra time spent on physical activity or enjoyment of hobbies, etc. This type of culture leads to better overall health. As an example, the French diet is very high in fat yet their rate of heart disease is less than ours because they eat freshly cooked, low processed foods in smaller portions, they take a long time to eat with friends and family, and are more physically active. (Wine of course has a beneficial affect as well.) Our insane lifestyles lead to the intake of highly processed, low quality foods which are fast and convenient because our culture views time as money and not time as precious.

Dorothy also added a comment "from the front lines" on socialized medicine:

In regards to the March 19th entry: In the past I worked in the operating room for many years and had many citizens from Canada and the UK come for surgery here in the US (combining surgery and a vacation) because the waiting lists were too long in their home country. (Now the trend is to go to developing countries as they are cheaper than we are). It is because of that experience that I often tell others who want socialized healthcare that it is not the best alternative.

When connected to the trend of obesity, these plague-level stats are enough to make news headlines regularly. It's hard to ignore a figure like 74 million, the total number of Americans with prediabetes, Type 1, and Type 2 diabetes.

I happened to catch the Senate Banking hearing last night on C-SPAN and I am writing as one of the unfortunate homeowners caught in this Subprime nightmare. I thought I heard mention of assistance being offered to help homeowners stay in their homes and I am seeking some assistance if there is any assistance being offered. I am days, possibly weeks (if I am lucky) away from eviction from my home which I have owned for less than 2 years. I have filed for bankruptcy protection and my life is in shambles; no money, credit trashed, savings gone, low paying job . . . a mess.

I will be 53 years old next month just shortly after my world implodes on me. I have been a renter all my life, always dreaming of homeownership. In June of 2005 I was moving back into the State of California from Arizona and I happened to see a cute little home for sale (1200 sq. ft), perfect for me. On a whim I went to take a look at it knowing that I probably could not afford it, but I went anyway and fell in love with it, so, encouraged by my agent I placed a call to her mortgage broker and during our brief communication he assured me that I could buy the home so we placed an offer ($609,000).

Now, again, I was moving back into the state, no verifiable source of income. I did have a substantial deposit being made into my checking account ($85,000). My tax returns or previous W-2's, check stubs, nothing was pulled to see if I even came close to earning the $12000 per month that I was told we would need to state on the application to make this work. Three weeks later, I was a homeowner. $609,000, 100% financing, 2/28, interest only, prepayment penalty, payments, no impounds, payments $4200 per month. Fremont S & L funded this loan and sold one loan to GMAC and the other to Homecomings.

So, I began using my savings to make these payments while trying to establish my business to support my home. I have been unsuccessful in doing this. So, my savings drained, I took a job in an administrative support position with a mortgage broker, salary plus bonus ($1600 per month plus $500 per closing), based on my origination and I am not an originator, I was hired as support personnel, so $1600 per month income, $4200 per month mortgage. My employing broker suggested that we refinance the house (9 months after I purchased it) to cash out some equity to hold me over until "my" bonuses kicked in. Stated income ($12000 per month - She knew what I earned because she paid me), 100% financing, interest only, $655000 loan amount, payments now $4700 per month, no impounds, 40 year term with a balloon payment. I borrowed $37000 more than I purchased the home for and my net cash out ws $9900. (Resmae funded this loan) and promptly sold them to Saxon who is now foreclosing on me.

So, my question continues to be . . . What happens to me and other borrowers like me now?? 1 in 200 or 1 in 15 I believe is the new statistic. These one in 15/200 borrowers who just wanted “The American Dream” of homeownership . . . who were told they could afford “The Dream.” What happens to them/me? Is anyone going to address our tragedy? Has anyone thought about the lives of people being evicted from their “Dream?” Bankrupt in many cases . . . foreclosure . . . property values declining . . . no equity . . . no money . . . savings gone . . . credit trashed . . . facing homelessness because the reality is who is going to rent to us??? We are not good credit risks??? Some of us will never recover from this heartbreaking and humiliating event. What do we do now?? Where do we go??

Personally, I will never recover from this. I am over 50. This was my first home, my dream, perfect in every way . . . I was a renter my whole life and all I ever wanted was a home. What do I do now??

I am weeks, maybe days away from foreclosure and eviction. I filed for bankruptcy to erase my debt so that I can attempt to pay rent (that is, of course, if someone will even consider renting to me and if I can find an apartment that I can afford that will take me and my two little dogs).

So, I will restate the question that I want an answer to and that is: What happens to me and the more than one of every 200 U.S. mortgage borrowers whose lives are in shambles? How do we recover from this???? What happens to us?? Does anyone have the answer to this looming question? Have any of the fat cats who participated in and allowed this to happen thought about the fallout of their decisions to line their pockets?? We are NOT statistics, numbers to be reported. We are real people, real families, with real lives with a real, serious, HUGE problem . . . Who is stepping up to help us??? WHAT HAPPENS TO US NOW . . . ???

Got a topic suggestion for you. Why do we now reward the losers as a society? Didn’t buy insurance? That’s ok, gov will make it up. Made a poor financial decision? That’s ok, gov will make it up. Spent 10 years on college loans to get a degree in anthropology and wonder how you are going to pay that back? Don’t worry, gov will make it up. Meanwhile, those of us who make smart decisions, save our money, live cheap, etc. continue to pay more and more in taxes to make up for the people who made poor decisions. And of course, the poor decision people never have to face the consequences.

Regarding gardening and self-sufficiency: All it takes is time.

My wife and I can TONS of stuff and try to build from scratch, amazing how your food costs go down and taste comes back when you are cooking from scratch.

Pizza: $2

Spaghetti: $1 (for easily a meal for 4), because we can all our own sauce, etc, all you pay for is pasta (ok, you could make that too, but we don’t)

Bread: 50 cents

Etc.

This is THE BEST book on just about anything in a rural setting (and you choose by what you mean rural):

Storey's Basic Country Skills: A Practical Guide to Self-Reliance

We have used that more than just about any book I can think of. Tells you everything, we now give them away as Christmas gifts, etc, always become a valued contribution to whatever family we give them, too.

Take a look, you’ll be impressed.

There may be many housing developments where the soil is SO barren (or even toxic to plants) that it is not worth the effort to attempt a garden. I grow some plants in containers and buckets, but I've learnt from experience at this location that getting a new type of plant from the garden shops and putting it in the ground generally fails. The limited amount of sunlight is a factor, but...

I know of some people that moved to the boonies (beyond northern VA) and started fixing up an abandoned farmhouse. They leased some of the acreage to a neighbor, who barely managed to have farm income equal farm expense with his corn and cattle. They experimented a few years ago with "we'll try growing something in the bottom", but that didn't work. It turned out the land was so worn-out that it took the chemicals the farmer used to grow that corn to make that happen.

Enter thought. The local farmers had an excess of cattle waste, and were happy to sell it to the city slickers, who got themselves a tractor (a baby tractor, which big agribiz would sneeze at) and tilled it in, then ordered up seed and REALLY got to work. After three years, the muck started turning into treasured trays of canned vegetables (they learned how to can too).

But this took years of patience and effort. In the recent past, housing moved from "buy and hold" to "buy and flip". What time was there for the flipper (scurrying to do the improvements and flip the house so they could afford to send the baby to private school) to take to grow a garden or teach a kid how to do it?

After seeing the 0.8% increase in food prices last month, I thought I would pass along the following - I didn't know if you pass this type of information to your readers. Some background first: We both have "black" thumbs, and tried for years to grow things. We even managed to kill a cactus. We couldn't grow corn when we lived in Iowa, even after spending enough money to feed a family of four for a year. Then last year we stumbled upon the Earthbox..a miracle. We placed it on the deck of our townhouse and by the end of the summer we had over thirty pounds of tomatoes. My husband was more excited than when he received his medical degree.

This truly is an incredible invention! It is being used by a division of the United Nations to teach children about the science of growing plants and to grow food in places where soil is poor and water limited.

The initial investment of ~$65 may be expensive for some, even though the soil, etc is meant to be reused for many years (only the fertilizer strip and cover need to be replaced annually). In this case I have included the URL for a do-it-yourself earthbox that costs approximately $10 to make.

We recently purchased two more earthboxes and will make two do-it-yourself models in preparation for the spring planting season. Food prices are only headed in one direction - hopefully this will help alleviate some of the pain.

www.earthbox.com

do-it-yourself instructions for constructing an Earthbox

Cheryl also offered a description of an automatic watering system:

The water reservoir in the earthbox needs to be filled at least every other day. This presented difficulties in the past if you were going to be away for an extended period of time. However, Earthbox recently developed an inexpensive automatic watering system.

Essentially, it consists of an adapter with two sides -- one side screws onto a spigot (like a hose) and the other side has a small gauge flexible tubing attached (~1/4-inch). The tubing runs to the earthbox and is connected to an insert that is placed directly into the watering tube of the earthbox. The insert is essentially a solid plastic tube that has a "float-valve" attached to it. This unit is long enough to reach the water reservoir.

When the spigot is turned on, the water runs through the tubing and solid plastic tube with the valve, filling the earthbox reservoir with water. As the water rises, the float also rises and shuts the valve, stopping the water flow. Then, as the water is absorbed by the plants, the float drops, the valve opens thereby allowing the water to refill the reservoir. Using this system, there is no longer a worry that one forgot, or was not home, to water the plants.

The system can be purchased from the company and can be set up to water multiple boxes simultaneously. With a little skill and patience, one could build his or her own watering system using PVC tubing and a rubber ball for the float.

If any of your readers would like to get up to speed on gardening and increase their self-reliance I can recommend the book

Gardening When It Counts: Growing Food in Hard Times by Steve Solomon.

In spite of the title it is not really a survialist tract. Although there are some interesting digressions into what and how to plant if you really need the result to work out, the book is primarily an excellent discussion of how to cultivate a really effective and efficient organic garden. This is not a fluff book - no pictures of cute plants - only pencil diagrams when necessary. Overall the tone is set for the intelligent layman and is packed with 300+ pages of really useful information. I found the book by digging around on the internet - and this book was consistently recommended on more sites than any other.

Energy consultant Peter C. Fusaro, chairman of New York-based Global Change Associates Inc. and co-founder of the Energy Hedge Fund Center, was among the first to notice the growing role of hedge funds and other financial players in the energy sector two years ago. He talked to Washington correspondent Lorraine Woellert about how the trend is contributing to price fluctuations and where it's going next.

Is the surge in oil futures trading exacerbating the market's ups and downs?
The Commodity Futures Trading Commission and New York Mercantile Exchange put out a study saying hedge funds weren't causing more volatility. That's nonsense. Traders are attracted by volatility. In the 1990s we had pretty flat markets. We didn't have a lot of trading volume. Now we're seeing bigger price moves, $2 a day. We never saw that before.

What kicked off this trend?
The trigger was availability of talent. Enron went down in 2001. Utilities started exiting energy trading. You had this meltdown of natural gas and power trading. Some of these folks started their own hedge funds, and some were hired by hedge funds. You had this pool of talent.

So interest in the energy sector is moving away from owners and consumers?
This is a financialization of the energy markets, and it's immature. (emphasis added) We size it at $3 trillion, compared to, say, $26 trillion in interest rate swaps. Energy is the world's largest business, at $4 trillion. It should trade at 6 to 20 times the physical market. The growth potential is enormous.

Banks and insurers also are in the game.
Banks are really the biggest player in this market. (emphasis added) They have the capital base, the global positioning, the traders. They have the relationships, they're in project financing.

What's the downside?
Risk, risk, risk. Energy is a risky business. You've got headline risk, weather risk, geopolitical risk--it just goes on.

What about volatility?
We saw a big hedge fund go down--Amaranth Advisors. But that's only 1% of the market. There's no risk to the financial marketâ...but [hedge fund investing] is too risky for small investors. This is big money that should know the risks and afford to lose it. Energy trading is a zero-sum game. When Amaranth lost $6 billion, somebody made $6 billion on the other side.

There are actually three models of health care used in the developed world: the HMO model, of which the UK model is a variant, the US model, and the European model or social health insurance. They fall neatly onto a two by two matrix, like surprisingly many things in life. One dimension is who provides insurance, the other who provides the actual care.

In the HMO model, you pay a fee to the HMO, and they do their best with this income to look after their population, delivering care in facilities they run. In the UK variant of this, subscription to the state HMO is obligatory, the delivering organisation is your local Strategic Health Authority, which is also your insurer, and what they consider to be the best varies from region to region. In this model all care delivered is included in the premium, but the interesting twist is that you cannot always get the included care delivered. And there is an all-or-none condition. You cannot take out supplementary insurance for treatment the state cannot or will not deliver, nor can you pay a supplement. And you cannot be treated by anyone else.

This model actually combines two functions. There is an insurance function, and a delivery function. The UK variant ties them together. It is a bit like a car insurance company with a chain of garages. The only people it will allow to work on cars it insures are its own mechanics.

In the UK variant, the SHA spend budget is fixed. Since the level of illness and demand is not, this means that if too many people present with the wrong kind of illness, they don't get treated. Thus we have in the UK random denial of drugs, both by region and by time of the fiscal year, postponement of procedures, frantic efforts to achieve 100% bed occupancy which leads to one of the highest rates of hospital infections in the OECD, and the use of waiting lists as a means of rationing care. It has emerged recently, for instance, that most SHAs have minimum wait times for common surgery such as hip operations. Yes, it seems incredible that a compulsory membership HMO could really have minimum, not maximum, wait times, but it does. A hospital in Ipswich was refused funding by its SHA because it was doing too many operations too fast, in defiance of the minimum wait time.

You may wonder whether in such a case you could just pay for the surgery or the drug. The answer is no. You can pay for private medical treatment, but then you have to switch to total private provision. If your local SHA, for instance, has stopped providing Herceptin as a budgetary measure, you cannot just pay for a course. You have to leave the State system, find a doctor, pay him/her privately again for consultation and tests that you have already had, and then pay for the drug. A doctor in the State system is not permitted to prescribe drugs or deliver surgery other than when funded by the State, and if the State has money for consultation but not for treatment, that is what you will get. In the same way, if a drug or procedure is not carried by the State system, you cannot get it while being treated by the State.

In short, the UK health care system can be characterised as a form of insurance fraud, in which the contribution is compulsory and defined, but the benefit is discretionary, and you can never know in advance whether you will be covered for a given illness and treatment. The risk of financially catastrophic illness is transferred back onto the insured party. So we have large numbers of people in the UK having paid once to the National Health Service for health coverage, then either taking out additional medical insurance, or in some cases taking out second mortgages on their homes to pay for surgery. Old ladies confronted with pain and disability and multi year waits for hip operations often do this. In private industry people go to jail for running schemes like this, but the UK Government tells everyone this scheme is the envy of the world.

In the US model, insurance and provider are both generally private sector and independent (Medicare excepted of course). You find your insurance provider, and if you require treatment, you have a defined range of treatments that are covered, and you select a provider to deliver them. The difficulty with this method is that the health insurance is very expensive, and the relative pricing power of the health care providers very high. The health insurance is very expensive partly because it costs more to deliver, because of the great efforts the providers have to make to screen out bad risks - people with expensive conditions. The result is that in the US health insurance has become unaffordable for large sections of the population, and those for whom it is affordable often only get it as a benefit of employment, so that it vanishes on layoff. Healthcare costs are therefore, not surprisingly, one of the leading causes of personal insolvency in the US.

The European model is probably the best and most rational. Unlike the UK model it splits the insurance and provision functions. It consists of compulsory insurance operated by the state, with a defined set of illnesses and treatments which are covered. This insurance costs very little to administer because it makes no efforts to screen. The insurance typically does not cover 100% of all conditions and treatments. There is a scale of what is covered to what percentage. Some things, such as private rooms, are covered to zero percent. It is possible to pay privately or to buy supplementary insurance to be covered to 100%. In Belgium there are Mutualities, some of which are state funded, and they will give discounted supplementary coverage on a means-tested basis.

In the UK model, health care provision is operated by the State, and the British health service is the largest employer in the OECD. I think only the Chinese and Indian Armies are larger, in the entire world. The consequence is that it is has one of the strongest unions, and consequently basic discipline is totally lacking. Successive campaigns have failed ever to persuade nurses to wash their hands between treating patients. This lack of discipline accounts in large part for the infection rate.

In the European model, by contrast, patients take the state insurance to the provider of their choice, and there is great diversity of supply. The consequence is more control of facilities by clinicians, higher hygiene standards, and far lower infection rates. The providers have no reason not to treat everyone who presents as promptly as they can, so there are almost no waiting lists. Everyone knows in advance what he or she is covered for, and the risk of too many of the wrong kinds of illness happening is not borne by the last people to get ill, but by the State insurer. As is normal in insurance. And if something is not fully covered, you can still get it by paying or drawing on supplementary insurance.

This is, in short, a health care system which works. It has the State doing the only part of the process where it has comparitive advantage - the provision of insurance. It ensures a competitive and varied provision sector. In Belgium, for instance, hospitals are run by religious foundations, universities, charities, corporations, municipalities. But one with UK infection rates, or US charging rates, would go bust in a month, because patients have to choose to be treated there. It also meets the basic goal of social acceptibility. No-one is denied care because they cannot afford health insurance.

The recent reforms in Britain have only illustrated more clearly than ever the benefits of the European model. The UK used to be able to claim that their model was enormously cheaper to run, even if it did suffer from long waiting lists and rationing. However, the effect of the recent reforms has been to raise costs to or above European levels, while not lowering the waiting lists, and not allowing people to know what they are covered for, or giving them entitlement to any particular treatment. The money has basically gone into an army of unionized adminstrators.

It is important to think systematically about this issue, because both in the US and the UK, we frequently find people talking as if there were only two choices, the US or the UK models. People maybe have an excuse for this in the US. But in the UK, the National Health Service model is commonly defended by the argument that we should not go to the US system, as if there were no other way. But there is.

There are two ways that don't work. One is fully private sector health care provision and insurance. The other is health care and insurance as a nationalised State industry. There is one other model which does work, and can be inspected whenever you like anywhere in Northern Europe. It consists of State insurance and private care provision.

Peter added this note in a later email:

Patients miss out as NHS cash floods in; Salaries soaked up new funds, reveals damning report

By a curious coincidence, this appeared today in the Guardian/Observer - a report of a Kings Fund study, showing that indeed almost all of the recent increased funding has gone on administrative salaries, not on patient care. The classic result of throwing money at an organisation too big to be managed properly, too unionized to be accountable, and too powerful to be changed - because its government. Those in the US who wish for 'socialized medicine' should beware. If they got their wish, they would like it even less than what they have now.

I'm 34 years old. Born in the nadir of the 'baby bust' in 1972, I have fewer peers than most who came before and after. One thing that they have in common with the older generation is the (more of less) ability to DO things.

Although I will admit to a self-selection bias, having little patience for people who aren't capable of some minimum level of self-sufficiency. I can do anything within reason, I finally bought a house and have been doing electrical, plumbing, demolition, framing, and a wee smidge of design.

Many people I've talked to about this house have said "Why aren't you paying to get all this stuff done?" Well, I've always wanted to do some of these things, and I am willing to trade some work income for 'life' income as it were. So far it's been great. I have my little brother the contractor to keep me from going completely off the rails, but it's going well.

I've read both books, though I'm more of a "left the bookmark in p21 of 'Gravity's Rainbow'" type. Pirsig leaves me with a bit of a 'man of his time' feeling, as seemingly everyone in the 70s was finding his or her self, with some of the boomer ego showing in the self-help books of the day... That said, Zen and the Art shows a level of connectedness with your surroundings that is sadly lacking in todays technically insulated world.

The fact that even in hippie-leftover Berkeley (as a lifelong resident I can snipe freely) the idea that food can be grown and prepared by schoolchildren and doesn't just magically appear at the farmers market, and is seen as a somewhat revolutionary concept, shows me just how clear the divide has become.

I can sympathize with your baby carriage repairer, though I would have welded that sucker up myself. Which I learned how to do not too many years ago in a public High School! 'Ag Mechanics' was a fairly popular class in my foothills of California school, now long discontinued for liability reasons. Which would be another rant that I'll address at some point, but it's amazing to me now that children were encouraged to learn how to be self sufficient and understand the workings of the machinery that powers quite a bit of the unseen infrastructure. That made possible the harvest and transport of that bunch if carrots to the aforementioned farmers market.

Your latest on self-reliance really resonated, Charles. That was me in high school in the late '60s, taking shop because it was what I enjoyed and broke up the rest of the day's math, history, etc. (I disagree with dropping shop from schools that are trying to be only academic.)

That was me as a student at Berkeley in the '70s; when a sauce pan handle broke off I went to a friend who worked in the shop of a science building who could spot-weld it back on.

That was me doing much of the work (self-taught from Sunset and Fine Homebuilding magazines) remodelling two houses, including wiring, plumbing, and tilesetting. (It gives you a special appreciation of taking a shower when you've crawled under the house to solder its pipes!)

And that's me now, refining my skills in Dreamweaver and Photoshop as volunteer webmaster and co-chair of Friends 4 Expo Transit (www.friends4expo.org) here in Santa Monica.

Ironically my son, now 23, went a different direction. Maybe because Dad always knew how to do house things, he became more athletic, social, and business-oriented.

Keep up the great writing. I read it daily. This one felt like an extra-personal conversation that needed a reply.

Charles - Cook, clean, repair something............please that is all beneath me! I pay people to do 'those things'! I am kidding but that is the attitude of most of the people I know. I have seen adult men call a tow truck to have their flat tire changed.

I think most of this attitude started along with 'faux luxury'. I am a sucker for Prada suits, made in Italy. Today people pay huge prices for a Calvin Klein shirt made in Hong Kong or Macau. It is the name not the quality. There was an great article in the Wall Street Journal about garment makers losing margin on men's suits so they decided to sell more upscale suites. That didn't mean increased quality of the fabric or tailoring --- it meant simply raising the price!

I knew things had changed when I saw a family ordering $35 worth of coffee at a Starbucks. The father had a workshirt on indicating that he probably worked at a lawn service company. I say this because I grew up as poor as it gets!

I know poor! My mother made a salary of $2500 a year! We would get one Coke a year. We never ate out. Maybe one 25 cent movie a year. Poor meant you did without. You repaired stuff when it broke. You took care of your stuff because it would take years to replace it! I have class photos when I was in grade school and the toe was worn thru on my hard black shoes.

America changed but it looks like we will be back to eating mustard sandwiches within the next couple of years. What scares the hell out of me is that I don't think this 'entitled' generation is going to like being destitute...........'upscale poverty' maybe?

I told a girlfriend one time my mom's favorite saying was 'just chew on your fingers' when we would complain that we were hungry! She just couldn't fathom extreme poverty.

I met this very attractive, professional woman several years ago and after a bit of conversation I found out she had just replaced the clutch in her car - herself! This became a joke among my male friends that we knew we had found the perfect girl if she 'knew how to hang sheetrock'! Most of the women we knew didn't have any basic life skills....................sad.

From my experience as a parent, I believe that many parents are abdicating their responsibilities to teach children about how to do things. People of my generation know how to do these things. but they have given up on many of these things due to either modern day conveniences or just plain laziness. They let their kids run wild and barely even discipline them properly.

I have taken my kids out to the garage many times to teach them how to do car repair (something I did in high school) or any of a number of things. I hope at least I will be able to teach them how do the things they need to support a household for minimal costs. My ultimate goal is to teach them how to learn the way college did for me. I believe that many parents are doing their children a disservice teaching them how to reach for a phone to solve all of their problems.
Thanks for all of the good reading,

My stepson Jeremy works for Milguard windows. In 3 mos, he went from a know-nothing punk to reinstaller, QC (quality Control inspector. There are basically two companies who do most of the windows in construction in the Bay Area, milguard and anderson. Jer says NO ONE knows how to frame what used to pass for square, since it really costs about 30% more to make things square. But these days it isn't even close. On his word, windows are yanked and windows and doors reframed. Lawsuits are common due to workmanship and the sealer used even when a disclaimer is signed by the construction company. Special extra workmanship is required on some windows, yet the builders waive it. He even reinstalls windows after they are stucco'd because they are popping.

Another construction problem unnoticed is the settling of ground. Ground isn't given enough time to settle and/or compacted enough, and the house settles, yielding huge cracks on 2 story span houses like in the entry way of the house. Also, the drywall shifts and you can see the seams. this is even a problem when construction begins to soon after the wet season. It absorbs the moisture. Most people are too ignorant to know there is even an issue. I was at my sister's house yesterday comparing the stucco on a 1925 house next to hers which was completely redone. Cracks everywhere on hers, particularly around vents, doorways, windows etc. On the old house, nothing. She commented it was probably due to the elimination of chemicals we can't use anymore. i don't know, but it was pretty dramatic. Think how many earthquakes that house has been through. My sister's, none since rebuilt. I'm sure some builder will be able to comment on this.

I read today's blog with feelings of happiness for myself and sorrow for others. My husband is a self-made man. He paid for all his own schooling, sometimes holding down up to 5 part-time jobs simultaneously. His father taught him how to wire a home, do plumbing, etc. He also helped his mother cook. (Such things are often an indication of men who make good husbands.) As a result, he does many of the repairs around our home - I draw the line at the roof! In addition he is a fabulous chef!! I feel sorry for others who are at the mercy of repair people and dining establishments.

Thanks for all your insights!

Loss of craftsmanship. This is been going on for a long time, particularly through the second half of the 20th century. I suspect both the cheapening of materials being used and the loss of skilled craft in handling them reflect two things - the development of mass markets where everything becomes fungible "product", and the attempt to hold down the price of materials and labor in the face of rising costs.

Some of these changes are clearly the result of improved technologies. Anyone who has ever looked at the complexity of the box gutter sees why it was immediately replaced by extruded aluminum spouting the moment technology made aluminum spouting possible.

Craftsmanship is simply expensive because it is labor intensive. And because it takes so much time, you can't produce a lot of whatever it is the craftsman makes. This is the reason pipe organs in churches and concert halls are so costly and limited in number. Much of the design and construction still has to be done by human hands despite centuries of evolving technology in other areas.

Lack of life skills. I think this is mostly a reflection of our times. People have become accustomed to believing they no longer need to know these skills. In the prosperity of the last 50 years they are used to living in, they are used to having money to pay somebody else to have these skills for them.

I agree with your rant about the loss of gardening skills and what it means. But I think the real point is this: why does Alice Walters or anyone else think anybody is going to invest the time and energy into growing their own food when they "know" all they have to do is drive down to their local outlet of the big-box 700-store grocery chain and buy their 3000-mile Caesar salad or their can of beans right off the shelf?

The crunch will come for these people if/when the grocery store supply chain breaks down or they no longer have the money to buy food. People in Appalachia may have been poor during the Great Depression but they generally had enough to eat. In a time when money was scarce, they didn't need it to buy food. They grew their own or bartered with their neighbor for it. For the people you describe, if times become tough and they no longer have the money to pay for these things, they literally may be too dumb to live. And they very well may not.

In this situation the tragedy may be for those folks living in cities who literally have no land or backyards to grow anything in.

Decline of literature. We can actually broaden this to include the other art forms beside literature.

First let's concede that some periods of time simply produce a dearth of great artists and great art while others produce more than their fair share. How much this may have to do with what people (audiences) of that time want to hear or see, I don't know. But I suspect it is quite a bit. We may simply be in one of those times of dearth.

however, in our time I suspect there are at least two causes for this decline.

First is the ubiquity of American popular culture. Along with creative financial products, this is what we have sent around the world. In this country it risks overwhelming many other forms of cultural expression. The problem with popular culture is that it is essentially an object to be consumed like a meal or a soft drink and then replaced with something else that becomes the next meal or soft drink. Creating something of quality or lasting value is not a concern here.

The mid-19th century and the Civil War era are full of wonderful popular songs and music which are now totally forgotten. And see how many teenagers or 20- somethings can tell you who Clark Gable, Gary Cooper or Cary Grant are.

Second is something I think is often missed. Sometime in the 1970s the US Supreme Court let itself be persuaded that so-called commercial speech (think advertising, TV shows for example) should be given the same First Amendment protection that political speech always had. Not too surprisingly, one of the side effects of this seems to have been a cultural race to the gutter since that's where the most money can be made. If you don't think there's anything to this, consider how quickly "artists" say "protected free speech" whenever someone takes offense at their perceived crudity or whatever.

Correspondent Bill M. recently penned the following observations about the demise of quality, and referenced a book of the mid-70s which found its way into practically every adult readers' hands at that time, Zen and the Art of Motorcycle Maintenance: An Inquiry Into Values.

I just briefly read a piece by Martin Weiss talking about the Quality over Quantity mindest of the Japanese versus the Quantity over Quality American mindset or something along those lines. I read Pirsig's book while on the North Shore (of Oahu, Hawaii) in my early 30's. I was moved by it. But since I was still fairly young and single just hanging out surfing and mountain biking it really did not have the upfront impact.

Now that I am in full blown middle age with the family to support and seeing all that I am seeing now it has come to be in the front of my mind, after 15 years. I find myself going nuts at times over the quality in the construction trade and pretty much life in general. It is so horrible what I see being passed off as work it makes me really flip. I learned the trade along time ago from so unbelievable skilled old Italian dudes in Jersey to who I am forever in debt.

After my /our generation passes there are going to be so few skilled people left. I am going to teach my kids every thing I have learned and make sure they work with me a few years before they go to college so they really have the skills to succeed in any environment. I guess the quality of life/work/products is in direct proportion to the quality of money.

I saw the CSPAN Democratic candidates forum recently held in Carson City, and listened closely to each one's remarks on health care. Only Dennis Kucinich plainly stated that the high cost and low coverage aspects of the current system are guaranteed (and welcomed) under a private insurance based model. This recent article reaches a similar conclusion:

Profit for Some or Care for All.

If private health insurers really believed they could compete against a Medicare-style government alternative, you'd think they would be endorsing such a system, which John Edwards promotes. But they can't, and they won't. Instead, they will continue to generate more smokescreen, which many of your own readers subscribe to, much of which sounds like: "The government is against alternative therapies", "The government is restricting freedom of choice". "The government wastes money on delivering health care", "The government promotes unhealthiness by its failure to ration health care based upon lifestyle choices and behaviors", or "I can cut a better deal with private providers if only the government would allow me to", etc., etc.

Left to the free marketplace, why would providers charge any less than what emergency rooms today charge? That's where the 47 million uninsured Americans get their primary medical care, and if you look at a typical bill from one of those encounters, you will immediately see a need for managed care. But the question now is who manages?

Stock market update: The market responded to my "Devil's Advocate" post by falling through the floor, revealing the downside of playing games with the Devil of market prognostication. Knowledgeable reader James C. was kind enough to send in the following rather ominous chart, the lesson of which is this: charts from different time frames can tell different stories, and it's wise to look at monthly, weekly and daily charts before deciding your investment strategy:


The MACD rolling over suggests a downtrend is in force.

An astute reader highly recommended Fiasco: The Inside Story of a Wall Street Trader

I have long suspected widespread manipulation in the equity markets and have a question for you. This evening I noticed something I've never seen before in my many years of trading. The afterhours charts of many market moving NASDAQ issues are painted with extreme readings - in all cases, wildly moving, impossible to trade movements that effectively render technical indicators useless. I've enclosed two charts as examples - note the range of the price channels in each. Other charts look much the same across the NASDAQ landscape.

Any ideas as to why this would be happening now?

The fact that these bars appeared in multiple securities at the same time could mean the vendor’s software may have had a problem. Also check what kind of volume was trading, during light trading the markets are easy to push.

Manipulation and stop running are trading facts of life. No government agency nor any amount of legislation is going to stop it. Skillful manipulators move an instrument enough to draw others in and liquidate into strength as they uncover stops. This is chess; we didn’t invent it; our job is to understand the game so that we can win.

I spotted many charts - both NYSE and NASDAQ with the same patterns. For several, I drilled down to 5 and 15 second intervals, looked at the tape, and they appear to be valid trades. However, I have contacted my vendor (e-signal) as I trade quite a bit and I've never seen this activity before.

Assuming the charts are valid, there were many gaps up today and my best guess was that 'da boys' might have done their best to prep the market for today. Also, I suspect today's activity is a trap as we haven't hit major fib levels for a solid 'bottom'. But hey, who knows. As Bruce Lee said, "Be like water". Flow with it.

FYI - I've attached a 15-second interval chart of Apple. (not shown here--CHS) It's a close up view and is representative of what happened with many securities yesterday after 'closing'. If valid - and not a glitch - this was a well orchestrated effort that began and ended at the same time for many securities. (emphasis added)

How many retail traders are willing to buy an inactive security? The fact that the public often gets aboard late in the game ( the speculative phase or worse, the distributive phase (top)) should at least help explain some of this game. For strong hands that bought (accumulated) the stock, to realize any gain the stock must move in their favor to be sold (distributed) at a profit. From whom did strong hands buy, when and why? And to whom are they going to sell, when and why? People need to think critically about the terms accumulation and distribution.

They also need to consider critically why an issue changes price. Who started bidding higher and why? And, if its so great why are people willing to sell it? Does anyone stop and think why Morgan Stanley is willing to sell 100,000 shares of XYZ. Why does the market rise and fall on sympathy related to one or a few issues regardless of the fundamentals of the sympathetic issues? If you were MSFT and wanted to do a buy-back of your stock, wouldn’t it make sense to send every trader you have down to the floor to beat it down?

Since it would be impossible to know all of this unless you are an insider, Technical Analysis helps as we can see behavior repeat itself and formulate the probabilities and therefore have an “edge”. In my opinion without an edge one is not playing the game but is being the game. And while being the game (fodder for the pros) may satisfy some unconscious desire for self-flagellation it is financially unproductive. Once again I recommend everyone who invests or trades read Reminiscences of a Stock Operator. It is entertaining and educational with lessons about the market that are timeless. (emphasis added)

The most recent findings on income inequality come from the New York Times' analysis of a November, 2006, Internal Revenue Service report on income in 2004. Although overall income has grown by 27% since 1979, 33% of the gains went to the top 1%. Meanwhile, the bottom 60% were making less: about 95 cents for each dollar they made in 1979. The next 20% - those between the 60th and 80th rungs of the income ladder -- made $1.02 for each dollar they earned in 1979. Furthermore, the Times author concludes that only the top 5% made significant gains ($1.53 for each 1979 dollar). Most amazing of all, the top 0.1% -- that's one-tenth of one percent -- had more combined pre-tax income than the poorest 120 million people (Johnston, 2006).

A key factor behind the high concentration of income, and the likely reason that the concentration has been increasing, can be seen by examining the distribution of what is called "capital income": income from capital gains, dividends, interest, and rents. In 2003, just 1% of all households -- those with after-tax incomes averaging $701,500 -- received 57.5% of all capital income, up from 40% in the early 1990s. On the other hand, the bottom 80% received only 12.6% of capital income, down by nearly half since 1983, when the bottom 80% received 23.5%.

The ongoing meltdown in the sub-prime mortgage market would not matter, except for those directly involved, except that it marks the unraveling of Ponzi finance units that, on the margin, were the plankton of the bubbling property sea of recent years. As the bubble was forming, riding on first-time homebuyers with first-time access to credit on un-creditworthy terms, and first-time speculators riding the same with visions of bigger first-time fools to take them out, all looked well. But as Minsky warned, stability is ultimately destabilizing, as those who require perpetual asset price appreciation to make book are forced to sell to make book. Such is reality presently in the U.S. residential property market, which has flipped from a sellers’ market on the wings of buyers with exotic mortgages to a buyers’ market of only the creditworthy.

Which means that the bigger fish in the domestic and global economic sea are going to be living on leaner diets. It also means that any given level of central-bank enforced short-term policy rates will become ever more restrictive with the passage of time. That is nowhere more the case than in the United States, where mortgage originators’ orgy of Ponzi finance stifled the Fed’s ability to temper irrational exuberance in housing with hikes in the Fed funds rate.

Barclays faces being caught up in the US sub-prime lending rout as it emerged that it has a $1 billion (£520 million) line of credit to one of the biggest and most tarnished players in the industry.

Barclays has the exposure to New Century Financial Corporation, which late on Friday said that it was in danger of breaching loan covenants. Its shares crashed by 63 per cent to $5.48 yesterday — a tenth of their value two years ago.

A critical little primer on the PCE vs. the CPI by yours truly: PCE vs. the CPI

Do you think Paulson and the boys engineered this little sell-off as a warning shot across the bow to maybe start a somewhat orderly unwinding of the derivative trades? If they pulled the plug they would not be caught too off guard and could step in to catch it.

Your recent posts about the market and economy have been great! To those of your readers who are 'fed-up' with the MSM, I can suggest the following website out of Canada: ROBTV

Report on Business or ROBtv out of Toronto is the one and only business channel I watch. I am lucky that my family has a summer home in Canada and so I am able to subscribe to StarChoice satellite out of Canada. They allow "Canadian residents" who have motor homes or winter homes in the U.S. to have a dish in the U.S.

Why is this important? Because ROBtv reports on the U.S. economy about 80% of the time. They often express their very negative view of how 'we' do business here and are not afraid of showing pessimism about the Canadian economy or the U.S. economy. Canadians have a realistic view of economic times, and their guests reflect this. They also spend a huge amount of time talking about Oil and Gold. Personally, I am heavily invested in the Kitco Gold pool, and have been for two years. As Marc Faber has said: Americans who want to own Gold, should own it outside of the U.S. and Kitco is based in Montreal.

Anyway, I highly recommend watching ROBtv . . AND . . anyone can subscribe to streaming video and watch it all day should you desire.

I am a fan (and regular reader) of your web site, and wanted to write in with some comments on your recent posting on interest rates.

For the most part, I have been in complete agreement with your “I wonder” speculations, but the suggestion that interest rates might be set to rise is one I find really hard to fathom. Your argument seems to be simply that a possible asset value collapse will leave too little money sloshing around the world to prop up US treasuries. However, if appetite for emerging markets, equities, commodities, real-estate, and precious metals evaporates, then the remaining pool of global wealth might still be substantial enough to fund US Treasuries. In fact, the sovereign debt of developed nations (i.e. the G7 countries) might be the only thing people would want to invest in. Precious metals might behave very much like all other assets that have been rising due to the credit bubble, just look at how quickly gold has been falling along with equities this past week (which shouldn’t be a surprise seeing as how Gold has risen right along with stocks over the last few years).

In short, if investors do decide to flee to safety, US Treasuries might well be one of the major beneficiaries. The bond market seems to be telegraphing this trend already. T-bills have been persistently sought after, even when the Fed has raised rates. Moreover, the market downturn of this week has led to a substantial increase in T-bill demand. Maybe this is giving us but a taste of what is in store with even deeper declines in gold, stocks, and real-estate.

Lastly, if the US does go into a recession, I wonder very much if government spending will stay as high as it is. I can certainly envision taxes being raised substantially, but I am not so certain that even greater deficit spending is automatically foreordained. I am not at all certain on this point, but it is something I wonder about.

P.S. Have you ever thought about adding a forum, or talkback, system to your blog? I, for one, would comment regularly if there was a facility on the site to do so.

After watching the markets over the past three days, and then seeing your article tonight... I'm not sure how to put this. You are right on. Sure looks to me like liquidity is fading.

My hunch is that the 300 point 'air pocket' in the Dow Wednesday was a trading program blowup. It took them a whole minute to get the program shut down. The implication is that the market went unstable. Wish I knew more. This one intrigues me.

In a nutshell, I think it is time to be short. ( Timing is important. Mine is often poor.)

Still, there is reason to be cautious. I was watching QQQQ trade again today. Am I missing something or did someone turn Nick Leason loose with another unsupervised account??? The chart is ugly looking. I mean, it looks like a Silver style correction is in the works - straight down. Looking at the candlestick chart, experience tells me a big (fast) drop is coming. The long wicks often hint at that.

As I write I see the Nikkei selling off again. As an afterthought, I can't help wondering if we will see some derivitive induced blowups in the near future??? Lots of instability this week, almost across the board. Lots of chart gaps.

I believe GDP figures ARE already deflated using the PCE (overall, not just core). So the 2.2% number is a real (inflation-adjusted) figure. Now, given the governments fuzzy math with inflation and GDP, there's probably 2% of "fluff" subtracted from actual price changes and who knows how much added to GDP ( e.g., imputed rents), so in reality we might already be in recession starting in Q4 if price changes and GDP were measured the "old-fashioned" way.

I just read your March 1st post and wholeheartedly share your frustration with the mainstream media. I gave up on TV ten years ago and have avoided all mainstream media for the last year of so due to this bias in reporting that you talk about today. I have come to the conclusion that the reason we see such bias is because we are not really dealing with reality here, we are dealing with a Ponzi scheme and the only way to keep it going is to keep up the hype.

Ownership of the mainstream media is very concentrated now by a few large corporations that have a vested interest in maintaining the status quo, i.e. a constant flow of money into stocks, thus keeping the Ponzi scheme from collapsing. I feel certain that this whole game will come to an end at some point and there will be hell to pay, but I also have no doubt that the mainstream media will devote endless pages to explaining how no one could have possibly seen it coming.

I have become fascinated (and infurated) with this phenomenon lately. I think there are a number of causes.

One is self-interested and financial: the press wants to say things that make their readers happy -- this sells more issues (or ads). This is akin to consistently putting only extremely beautiful people (one might say /more/ than humanly beautiful given all the touch-ups) on the covers of popular, non-economic magazines. It's obviously unrepresentative of reality, but it makes people feel good and impulsively buy. The potential and likely conflicts of interest of course start to get more ominous when you consider the level of real estate advertising in the MSM (60%+), or trading/investing "support" services in the financial press.

Another is the chilling effects of government interference and connections between Wall Street and the government (which by now should be obvious, with our Goldman-CEO/Treasury Secretary). The media was bludgeoned and intimidated into submissiveness especially after the 2000 and 2004 elections, after those who "got it wrong" were shamed. This increased the wholesale acceptance of "official" government information and parrotting of what other media sources had already said. This behavior probably extends out from election coverage to economic reporting, because it is a cultural change in the media. The treatment of economic reports is now practically kindergarten-level in sophistication and understanding, with only a few rays of light in the form of some editorialists (such as Krugman at the NYTimes or Caroline Baum at Bloomberg).

I also suspect that the "recession fake-out" in 1995, which turned the majority of the economic press into "recession perma-bulls", plays a major part. Of course, the aversion of this recession was probably pulled off not naturally but engineered by the one-time gimmicks of ZIRP in Japan and the abandonment of reserves requirements in the US, which I discuss in my article "What (Really) Happened in 1995?".

All my friends who are intellectually capable say: "I do not want to hear about all this gloom and doom, do not speak to me about this again." Reality?? It is just the cycle. Credit bubble cycle, free computer money for cars, houses, etc.