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Another Canary in the Coal Mine

Posted by Larry Doyle on June 28, 2010 3:30 PM |

Where do you see the economic crisis playing out in your daily lives?

A week ago, I referenced my surprise at the ability to buy outstanding seats at face value via an online broker to a weekend Boston Red Sox game vs. the Los Angeles Dodgers.

That commentary prompted an interesting message from a regular Sense on Cents reader with another interesting eyewitness ‘canary in the coal mine’ observation. This reader was returning home from a business trip to Brazil. He shared the following:

Coming home from the airport, driver points out that the cash toll lanes have become disproportionately jammed relative to EZ Pass.

Says it reflects how many fewer credit card accounts are being used. So it’s not just the discretionary spending (i.e. BoSox tix) that reflects the weaker consumer, but the day to day routine expenses. Meanwhile Albany still can’t pass a budget. Q: why would Cuomo want the job? It’s like trying to jump ONTO the Titanic.

Brazil on the other hand is incredible. They have learned their lessons on the fiscal side and FDI (foreign direct investment) is pouring in. I’m going to learn Portuguese. Much rather go to Rio than Kowloon!!

Interesting observations, not only in terms of traffic patterns here at home but then juxtaposed next to developments in Brazil. Speaking of which, let’s take in a little sun and fun from that beautiful land:

  • Bob

    …or should we Blame it on Rio??

  • fred

    I had a dream last night that a broker came up to me and told me that my account was worthless due to a margin call on a long $US position. The reason I didn’t have a hard stop on was because of the “flash crash”, The $US had never experienced such a large move in the past, so I felt safe.

    I said to the broker “surely the $US has some value, my account couldn’t be worthless, there will be anarchy”.
    My only solace being that my account was only 1/4 of my net worth. I then realized that everything I owned, what I paid at the store, my wages, home, bank account, EVERYTHING was valued/priced in $US!

    Brazil may be doing well enough now, but it was not too long ago (2000-2002?) that they experienced a “currency devaluation”. I had a friend who had taken out a loan to plant a crop next to his church, when the currency went down, the value of his crop dropped. Given the debt service on the loan, it would have taken him over 50 years to pay off the debt. He was a pastor in Brazil, he brought his family to the United States and took a job as a janitor; his goal to someday save enough money to pay down his debt and return to Brazil.

    What would happen here if our currency devalued, what supports the price of our currency, our exports? Isn’t one of our primary exports our national debt. It’s time to wake up before this dream we’re living becomes a reality!

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