Monday, June 26, 2017

College Degree VS Real Job Training

College graduates make Two-Thirds more than high school graduates. That's the statistics. Most people assume that if you go to college you will have a higher income.I think that smart people go to college but going to college doesn't make them smart. And you know you cant prove causality with statistics. The fact that college graduates make 2/3rd more, well those people would have made more money anyways. Bill Gates never finished. Henry Ford never went to college.

A system that we see in the South East of our country. The Germans have a very strong apprenticeship program. And many of them move manufacturing plants to the South East. And they brought with them this apprenticeship program and they combine on the job training with two year college degrees. They are training people for real jobs. These people come out very well. And a lot of US companies are emulating this program. 

Monday, June 19, 2017

How our Savings Rate affects economic growth and retailers

From the early 80's the savings rate in this country was around 12 percent. That meant people were spending 88 percent of their after tax income. The savings rate got down to 2 percent meaning people were spending 98 percent of their after tax income. 

The savings rate is now back around 5 percent and I think it could go to double digit numbers. So it does mean in terms of the economic growth you are getting reversal. Its an on-going feature, an longer term issue. 

Thursday, June 15, 2017

Finance is a healthy and necessary parasite according to Michael Lewis

Whats the role of Finance ? Michael Lewis pointed out that Finance is a parasite on commerce, but its a helpful parasite, its a necessary parasite. In other words, you need Finance to move money from the savers to investors. to grease the wheels of Finance. And that really was the spread lending by banks. That's traditional banking. 

But the guys running the banks were not were not satisfied with it and they got involved with all kinds of off balance sheet vehicles, derivative origination's and proprietary trading. A lot of these things that were very troubling and led to the Dodd Frank law regulations and all the banks had to be bailed out. The Banks have gotten bigger and more powerful and the concentration of financial power in this country and I dont think its a terribly healthy situation.