Many years ago (19 to be exact) an otherwise unknown research firm put out a report on the average amount of time spent during an American’s life doing various mundane tasks. It was presented in terms of years, so many years spent watching TV, so many washing dishes, and so on. The media loved it 
and widely reported the numbers along with the obvious commentary that we Americans were wasting our lives with trivia and drudgery.
Except that to anybody who thought to do some simple math in their head, the numbers were hilariously implausible. I wish I could find a copy of the report now, but this was in the pre-internet dark ages. My possibly faulty recollection is that they said we spend an average of 6 years in the bathroom.
If you don’t think about it, and want to write about how we spend too much time alone in a tiny room, 6 years sounds just believable enough to use. But if you do some quick calculations, you realize something is very wrong. Assume the average life expectancy is 72. (About right and it makes the math easy.) Then each year of your life is 20 minutes per day. Two hours a day in the bathroom? Every day? Average?
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Friday calls for lighter fare, so today I thought I would present evidence that this financial crisis we are now living through is not particularly unique. Realizing that some may find the idea that we are doomed to go through this 
every few decades less than cheering, I will present it in the form of a quiz. As I’ve said before, everybody likes a quiz.
Question 1: The Buildup
In what year did BusinessWeek editorialize as follows about the stock market?
For five years at least American business has been in the grips of an apocalyptic, holy rolling exaltation over the unparalleled prosperity of the "new era" upon which we, or it, or somebody has entered.
Stock prices are generally out of line with safe earnings expectations, and the market is now almost wholly "psychological."
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I know I shouldn’t be doing this. I talked about home prices yesterday, and I’ve singled out the Wall Street Journal’s Brett Arends way too many times already. (This will be his sixth mention in this blog. See also one, two, three, four, and five.)
I don’t want to give the impression he is exceptionally bad. He’s merely typically bad, but writes often and on topics I like to talk about.
But Arends ran this column yesterday sharing his thoughts on house prices and, well, fish gotta swim and birds gotta fly.
He starts out by mentioning the previous day’s release of the Case-Shiller home price indexes for March. This update, which was, let’s face it, more or less as expected, was “startling” to Arends because of “What the latest data show about the long-term of the real estate market.”
Apparently, this last set of numbers was the missing piece needed to allow Arends to make the observation that since the late 1980s and early 1990s, house prices have only beaten inflation by one or two percentage points a year.
Well, golly.
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I’ve always wanted to invent my own derivative. I realize some of you may think that’s strange, but for a finance geek like me, it’s only natural. And I think I’ve come up with a good one.
It’s for people without appropriately large emergency funds to live off if they lose their job or otherwise fall into financial distress. I call it the Expensive Loan Option, or ELO. The way it works is that you pay me a fee of $X per year and I guarantee that you will be able to get a loan at any time during that year for $5X at 20% interest. So, for example, if you want to be sure of being able to borrow $10,000 at 20% interest at any time during the next year, just pay me $2000 and you can sleep soundly.
Excited? Well, of course you are. Perhaps you have a nice job and enough liquid assets to pay four months of expenses should something nasty happen. That’s okay, but the Fabulous Suze Orman has told you that you need eight months worth of liquid assets. No problem! Just buy an ELO from me. If it costs you $3500 a month to support that glam lifestyle of yours, then just sign up for a $14,000 ELO for the modest fee of only $2800. I take PayPal.
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Some days I agonize over what to write about. Other days the decision is made for me. Yesterday’s Sunday New York Times Magazine had a long story on Suze Orman, so this is one of those days without agony.
The genre of the article can probably best be described as celebrity profile. It’s not quite a puff piece. It mentions just enough minor flaws to give its 
subject some character and the author does her journalistic duty by mentioning that Orman once did advertising for GM and certainly does what she does for the money.
On the other hand, there is not much in the way of discussion of what Orman has to say, other than what is necessary to explain what it is that she does for a living to the few readers of the Times who have not yet heard of her. Mostly, the article is about the fact that she is wildly popular right now, without much discussion of why.
Which might strike a person as a little odd if they thought of Orman as a writer or pundit. It would be hard to imagine a story on a spike in popularity of, say, Malcolm Gladwell or Rush Limbaugh, without a few paragraphs on what made them particularly big just now and maybe even a hint of criticism from a responsible third party.
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and widely reported the numbers along with the obvious commentary that we Americans were wasting our lives with trivia and drudgery.
Media, Musings, The Big Picture | Frank Curmudgeon | 
June 4, 2009 9:00 am | 
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