Think the Bank America quartly figures last week of people not paying their credit cards and the spin out of (I think) Visa to be a separate stock company kind of looks bad. Some folks say we are turning a corner but it may be into a very dark ally.

The new bankruptsy laws are really going to hurt when folks realize they no longer can "walk away" from their debt.

vallejo, california is threatening to file bankruptcy but some people say that is a ploy to force the unions to settle.

Under US law a city can not declare bankrupsy. Bridgeport CN and a city in CA tried it in the 80's and 90's it was not allowed.

Of course as far as police and fire departments the work could be done cheaper with mexican illegals. If there was a fire or such a city council member could flag down a few at the work corner give them $10 each to put out the fire.

I guess things have changed at least in California. The reason I said this is that Bridgeport and New York City at one point wanted to restructure their debt through bankrupsy and it was denied as a option in court.

The short of it is - I am wrong.

It seems then that this will be a refuge of last resort for a lot of citys. I guess they might take the opportunity to outsourse fire and poliece services. Municipal bonds are considered a pretty "safe" investment this could spell some more portfolio disaster for funds.

On to the subject of commodities.

Oil is being speculated as are metals and food products. Hedge funds are manipulating prices by making buy orders. As a previous poster noted the price of oil is not rising due to a shortage of product or supply issues it is due to a increase in futures demand. This increase is greater than the making of ethanol (which has not started really) or even demand from foreign countries which increases but at a more steady and predictable rate.

The money that was in real estate and loans are now moving to commodities and other types of investments. Hedge funds have large amounts of cash and leverage. In exchange for the very large cash investments of the hedge fund members they guarantee a high return. Market manipulation is part of that as they are not able to be investigated or monitored directly by government agencies. So the present prices across the commodities market are due to speculation by the same folks who brought you the housing crisis.

The way profits are accumulated by hedge funds are accounted for in very short periods. It will probably be possible for them to resell the futures to real buyer (buyer that will demand delivery) for the inflated price and unload them on the public and hedgefund keep the speculated profit.

The NY Times article is interesting. particlularly the parts about how the concept of loans into commodities.

Some of the decisions the woman described made seemed on the face like things that would lower her interest payments but to pay back all at once came with a penality payment or to transfer came with hidden payments.

To me it really brought forward the fact that in order to wade through the complex contractual and weird loan products points to a big need to educate the average american in school understand enough to protect themselves. The companies that create the finical instruments seem to be selling them in such a way as to confuse even a reasonably astute person.

When I was in high school I took a lot of accounting classes and they proved invaluable to getting work and being able to understand contact and banking terms. There should be something even better now.

If the buyer needs to beware at least they should be on a footing to understand what they are getting into.

This was a high school that had a lot of work force style training for students. A big chunk of whom were going into the workforce after high school. Most of the math classes were baised how you would use math in construction fields.

The acounting classes were in a couple of levels. The first prepared you to be a acounting clerk being able to walk into a job with full basic entry and balanceing skills. The secound level was for training to work as a clerk in a bank as opposed in a busness. In that class you got into more of the types of books and caculations used in banks. The courses led directly into higher courses in the Jr. College. I took them so I would always be able to get some work. Came in handy.

Most of my friends took a lot of the shop classes and did construction or tool and die work.

There were home economics classes which had a lot of stuff on home budgets and basicly being able to do all the stuff you needed to do to be independent. IRA's and Credit were part of that as well. Mostly that you should be saving about 10% of you income and that credit cards many times led to disasterious overspending if you were focused on the min monthly payment (it was expained how much you paid for the money over time). Got some cooking training too.

Rick Reuben wrote:

Big John wrote:When I was in high school I took a lot of accounting classes and they proved invaluable to getting work and being able to understand contact and banking terms.

Basic economics and finance education was almost nonexistent in my high school; it wasn't in the core curriculum at all. Maybe you ran into it in math class, being used as an example to explain interest. That's about it. We were never taught about fractional reserve lending or fiat currency, period. That's like an English class leaving out Shakespeare.

In 7th grade Home Ec, we learned how to write a check. W00.

In 7th grade Social Studies, they showed us this:

http://www.brillig.com/debt_clock/



and then today, I just found this:

http://cgi.money.cnn.com/tools/debtplan ... lanner.jsp

Yea they took the debt clock down reciently I think there was some construction that took out the building it was on. Did they relocate it? It was going backwards for a while and then they were having trouble adding zeros behind it a couple of years ago cause the building was not wide enough.