Slate’s The Big Money had an amusing post the other day about some fake Treasury Bonds that were seized earlier this year. The post is mostly about the implausible conspiracy theories that were subsequently hatched, but 
what’s interesting to me is the implausible nature of the fake bonds themselves.
In two separate incidents, Italian authorities confiscated stacks of bonds with a total face value of $250 billion. A collection of US debt that large is itself pretty unlikely, but what really pushed it over the frontier of believability was the fact that these stacks weren’t all that tall. Denominations for single bonds, that is, single certificates, went as high as $1 billion.
To understand just how far beyond the realm of reasonable this is, you need to know that a) the government stopped printing paper certificates in 1986 and b) in the days in which it did print certificates the highest denomination was $100,000. The total amount of authentic paper bonds still in circulation is $105 million. That’s million with an M.
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Another last Tuesday, another positive report on the S&P Case-Shiller Home Price Index. The 20-city composite was up 1.2% in August, putting it 4.85% above its April low. That’s a long long way from the heights of 2006 (it’s now 29% 
below the July 2006 peak) but it’s increasingly looking like this is not just a blip in the data.
17 of the 20 cities recorded gains. Charlotte, Cleveland, and Las Vegas were the only unfortunates. Charlotte and Cleveland don’t have much to worry about, they were both up more in July than they were down in August, and overall they saw relatively modest declines in the bust.
Vegas, on the other hand, can’t seem to snap its losing streak. This makes three solid years of down months. The only consolation seems to be that Sin City was down only 0.3% in August, breaking up two years of monthly losses greater than 1%. It’s now down 55% from the peak. Yikes.
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Insider trading and other nefarious stock market operations seem to be on our minds lately. I guess this is natural. Despite eye-popping returns since March we are still living in the aftermath of disaster and periods of market stress have historically been periods of concern about an unequal playing field.
For example, the SEC was established in direct response to the 1929 crash in order to enforce a new set of rules that would make the stock market a fair game for all. I can’t believe that very many people thought that the crash was due to insider trading and its ilk, but I guess it seemed like a good time to clean up the the street.
One reason why we worry more about fairness when the market goes down may simply be that when the market is chugging along to new heights it is hard to see flaws in it of any kind. Everybody is fat, happy, and getting richer. It is only on the inevitable downswings that the scales fall from our eyes and we notice problems that were always there.
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Because it can.
This week the College Board (the SAT people) released their annual survey of college tuition and found what they always find. College got more expensive 
last year. This time ’round public colleges went up 6.5% and private ones 4.4%, both of which are pretty steep increases when compared to the 2.1% decline in the CPI over the same period.
This was a particularly bad year for the tuition vs. inflation comparison, but the overall trend is striking. According to the College Board, over the past thirty years the average tuition cost has tripled in real inflation-adjusted terms. It’s hard to think of anything else we buy that has gone up as much. It would be like paying $12 a gallon at the pump.
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The buzz article of the month seems to be Time’s Why It’s Time to Retire the 401(k) which came out October 9th. It is not to be confused with Time’s Should the 401k Be Killed? from last winter. And I am sure the serious print 
journalists at Time would be offended if I likened their work to the 60 Minutes piece from the spring Retirement Dreams Disappear With 401(k)s. (See my comments on that here.)
I suspect there are many more such articles and TV news segments out there telling us how 401(k)s are terminally broken. I don’t have the heart to search for them. These particular three say roughly the same thing, with similar quotes from experts and profiles of folks in their sixties who are poorer than they expected to be and, we presume, than they deserve to be.
There is an unavoidable, and I think completely unhelpful, undercurrent in this genre that the 401(k) is not a good idea with some serious implementation issues, or even a noble experiment that failed, but a scam perpetrated on workers by Evil Big Business. 401(k)s, we are told, were designed by our beneficent law givers in Washington as a nice side dish to the main retirement course of corporate pensions. Somehow, when we weren’t paying attention, employers pulled a switch on us and passed off the side dish as the whole meal.
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what’s interesting to me is the implausible nature of the fake bonds themselves.
Government, The Big Picture | Frank Curmudgeon | 
October 28, 2009 11:59 am | 
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