Serious Studies

What The Current Debt Crisis Teaches Us

  1. When there is no Stupid Money in the system, everybody gets very freaked out.
  2. The economy now runs on deals that are financed at fifteen times cash flow, with less equity up front than it took you to buy your house.
  3. If big lenders can't jack up the prices for assets, deals will only get made if they make operating sense. This puts a crimp into the system it just can't tolerate for very long.
  4. Wall Street is very uncomfortable if no deals propped up by massive debt are in the pipeline.
  5. Unless companies can buy growth they can't sustain over time, security analysts are unhappy with their fundamentals.
  6. No debt, no glory.
  7. The Feds will take action to ease this kind of crisis before they will, say, investigate why the price of gasoline seems to be determined by the affluence of the neighborhood in which each gas station in located. Gas this weekend on this section of Long Island, for instance, is $3.60. Gas 40 miles away back in Queens and New Jersey is $2.89 or lower.
  8. The Feds will move more swiftly to help the banks with their debt problem than they will to make sure that airports work properly.
  9. If bankers, lawyers and traders don't make hundreds of millions of dollars per year off the deals they engineer with Stupid Money, there will be no one to buy a two bedroom apartment in Manhattan for six million dollars.
  10. When you are addicted to something it hurts to take it away. So, you know, why do it? Bartender! More debt!
13 Comments Add Comment


You can always tell a person who can't write because they resort to nonsense like "frickin'" and "bull**t" to cover up the fact that they are experiencing difficulty stringing together concepts and words.


Anyone who understands finance 101 knows the power of leverage. Each day more and more people both in business and in private are attempting to leverage the future of this country to the teeth so they can have enough cash to by their kids the latest doodads and pay the mortgage. Can you say 90 year mortgage? WTF? Greed is coming full circle. Welcome to the beginning of the US-led New World Order. Business as usual is in cahoots with politicians to ensure the survival of the Billion dollar corporations.

Have a good day!

Low interest rates led the financial markets into this mess. Funny how the markets are clamoring for cutting the Fed rate as the solution.

Why wasn't there a liquidity crisis in the '80's when interest rates,ie, the 10 yr Treasury bond, were over 8 percent?

The Feds will take action to ease this kind of crisis before they will, say, investigate why the price of gasoline seems to be determined by the affluence of the neighborhood in which each gas station in located.

Affluent neighborhood = higher real estate prices = higher retail prices to compensate for the higher operating cost. Not to mention, a $0.31 difference on a 20-gallon tank filling up twice a week means you end up paying an entire $600 more a year living in Long Island than some poor guy who makes $10 an hour living in Queens.

I'm sure the Feds are going to get right on that.

Since wealthy people tend to live further away from industrial centers and further from major shipping routes, the gas is costlier the further it moves away. The real question is why San Diego's gas rivals Hawaii for the highest price in the country. It can't possibly be that much extra to drive the 2 hours it takes to get from LA to San Diego versus actually having to put gasoline on a boat and ship it to another island. But since San Diegans drive a lot and demand is high, prices will continue to be high as well. So yes, if you're wealthier and will pay for higher gas, they'll screw you over and make you pay for it. Just be lucky you can afford to live in that wealthy neighborhood.

And Americans are taught debt is ok because owning a home is an American dream which should theoretically be achievable by everyone. Problem is it's not. It doesn't even take just two incomes anymore, it takes two very well compensated incomes. But don't blame the debtors, blame the idiots who drove up the prices of homes in the first place and the huge income gap in this country that keeps growing and growing.

On the surface you would tend to agree with the whole, higher real estate leads to higher prices for gas. Then why does this really only occur in gas??? Is a quart of milk or a loaf of bread 25%+ higher. Do Mars charge more for the candy bars in the local stores.... The answer is really simple, it is because they can, the price elasticity for gas is not very high in these affluent areas. Those less affluent will shop around for the better price in their local area. There is also the opportunity for more petrol stations due to the higher density of population in these areas. Therefore with these two reasons lower prices in the cheaper suburbs, rent actaully has very little to do with the equation.

And here I thought it was just because I was being gouged!

The thing that amazes me is that truly, if anyone paid attention in their College economics class, really this should not fundamentally come as a surprise. The thing that really pisses me off about all this - is how people are acting like they've been victimized. I'm not saying that the whole situation isn't a bit "messed" up - capitalism can be like that sometimes…but it is what it is. And really - you'd have to be hovering at a 2nd grade reading level to not see this coming. At the end of the day, it isn't rocket science…it's simple math (and capitalism).

P.S. No one is holding a gun to your head and forcing you to drive your high end gas guzzling new car. When the circumstances call for it - try exercising a little economic commonsense and practical decision making. Perhaps if we weren't acting like blind rabid consumers - keeping up with the jonses and instead we reclaimed our financial sensibility we could influence things. (help me out was that a run on sentence?)

The Gasoline Octane and how they are ripping off consumers per-gallon, and they can't even see it happening to them. As a consumer you should be aware of the following when purchasing a "Octane price" of gasoline. In San Diego, CA we all know at most gas station 92 Octane.

92- $4.12 /gallon
87- $4.09/gallon
84- $3.50/gallon

However, after filling three test gas bottles with different octane of gasoline 92,89,84 and after testing each octane, with a octane tester. We found that most of the octane's of each gasoline was marked with the wrong octane of the gasoline was found to only to have a 87 Octane reading gasoline at some Gas station.

Most of these reading were tested more then three
times for reason of ruling out any ears between
all octane of fuels.

What we have found; was we paid $4.12 for a 92 octane fuel.

In conclusion we paid for $4.12 for something that was only worth the price of 84 octane fuel, which should of been only $3.50 In truth it showed a lost of 62 cent per gallon. As for the lost of a 20 gallon fill
up. I lost a whopping $12.40 per gallon that was taking from my wallet.

Now I am think of hiring some consumer affair attorneys to file a lawsuit on three gasoline companies for my losses since the the gas crisis started.

Any Ideas of any attorneys that want to go up against three major gasoline companies.

According to my opinion this is a very nice and informative blog.

Drug Rehabilitation Programs

There is not just debt addiction. Possibly the drugs addiction is also make an involvement in the daily life.
Sean Cruz
Substance Abuse Center