Juggling Dynamite

I continue to marvel at how many intelligent, educated people are completely missing or underestimating the energy and transportation revolution underway today.

For consumers, the changes offer meaningfully lower operating expenses and increased productivity along with less pollution and improved health benefits.  For businesses and investors there are incredible opportunities but also enormous downside risks for those committed to status quo thinking, products and services.  This creative disruption is massive and happening much faster than most people realize.  For a good review and discussion see:  Inside Tesla–And What’s really disrupting the auto industry:

Some companies are moving quickly and innovating within the automotive industry, but others are stuck in the past. In March, for instance, I criticized GM for spending $17 billion on wasteful stock buybacks and, in my opinion, not pivoting quickly enough to electric. (Buybacks, we believe, are a major cause of harm to the U.S. economy).

…Within a year or two we could have EVs that are cheaper to buy than the median new car in America. And they will be 90% cheaper to fuel on a charge, on a per mile basis, and 90% less to maintain. So essentially the operating cost and the marginal costs are next to nothing.

In other words, the economically rational choice to make will to be to buy an electric vehicle.

So within two or three years, the mass market could go toward electric vehicles because they’re believed to be superior products—they’re cheaper to buy and to maintain and to fuel than the ICE car.

Danielle was a guest today with Kerry Lutz on The Financial Survival Network, talking about recent developments in the world economy and markets.  You can listen to an audio clip of the segment here.

Danielle had an interesting article on her site written by CNBC anchor Steve Sedgwick. He explores the concept of the Spend Now, Pay Never attitude that has swept the UK (and the US as well). Millions have leased shiny new cars and will never own them. They’ll never be paid off. This is a symptom of declining savings rates in many countries. Interesting turn of events.

This story closely correlates with the fact that most of us concerning our personal finance, as in life, are our own worst enemies. We engage in long-term destructive behaviors for the sake of a short pleasure. In addition, we then look to correct a life time of failed financial planning by upping our appetite for risk, while being cheered on by the financial industry. A recipe for disaster.

Great suffering and waste has been inflicted by the runaway finance sector the past two decades.  The compounding costs continue to bankrupt nations and still the bankers are back on top, enriching themselves at the expense of everything else.  The evidence is obvious but never more clear than the fact that the fiduciary duty rule, that would require financial advisors to put the best interests of their clients ahead of their sales targets, has been sidelined once more.

Wolves have been aided and abetted by governments to keep devouring the sheep.  Democrat and Conservative governments, same result:  Bad guys still winning…9 years later and counting.   See  Financial crash anniversary recalls the risk of corporate greed:

As the evidence shows, including the FDIC’s most recent quarterly data, banking revenue and income are at or near all-time highs and loan activity is strong and steadily increasing as well.

The unavoidable conclusion, then, is that the industry’s deregulatory push is really about getting the bankers’ bonuses back to pre-crisis levels. That explains why the deregulatory focus is on weakening the capital, liquidity and derivatives rules along with the ban on proprietary trading (the Volcker Rule).

Those rules rein in the banks’ highest risk and most dangerous activities, which also happen to be the most lucrative activities that lead to the biggest bonuses.

With revenue, profitability and lending all up, there simply is no merits-based case to be made for deregulation. Equally important, the anniversary of the collapse of Lehman Brothers and the events that triggered the 2008 financial crisis should remind everyone of the dangers to a country forgetful of its past.