“And Lord, we are especially thankful for nuclear power, the cleanest, safest energy source there is. Except for solar, which is just a pipe dream.” ~ Homer Simpson, 1990
From Dan Denning in Elwood, wishing a happy Thanksgiving to anyone with something to be thankful for:
It’s an American holiday later this week, but Happy Thanksgiving Australia! We are thankful that you read our Daily Reckonings and take the time to write in. We are also thankful to learn so many new Australian swear words and insults. Our vocabulary expands!
Thanksgiving, by the way, commemorates the first winter America’s white European settlers spent in the New World, nearly starving on the Atlantic coast. They were saved be the generosity of the indigenous people, who introduced them to corn and pumpkins.
Later, the relationship soured—no thanks to measles, small pox, and fire arms. But aside from the history, Thanksgiving in America is a day now set aside to reflect on your good fortune, luck, bounty, blessings—whatever you’d like call it.
Australia, being “the lucky country,” has a lot to be thankful for, too. We are glad to be here, and glad that we have not yet been kicked out. So we’ll celebrate on Friday with family in Sydney, although we are missing the traditional turkey, pecan pie, and cranberry sauce. VB will have to do.
In the meantime, maybe the government should go hire the Boy Scouts in Detroit. For the second time in the last 10 years, a Michigan-teenager has produced his own nuclear reaction (here’s the first time). Thiago Olson was the 18th amateur to create fusion all by his lonesome. We hear that Australia is short nuclear scientists. Here’s the solution, import American teenagers!
It’s been a bad 24 hours for Australian icons. First, Ian Thorpe decided to retire from competitive swimming. We wish him luck outside the pool. Next, Qantas (ASX: QAN) has been approached by Macquarie Bank (ASX: MBL) and U.S. pirate equity group Texas Pacific with a takeover bid.
The counter-attack of the capitalists is getting more aggressive. “Private equity buyers have announced about 1,000 U.S. takeovers this year worth a record $356 billion,” according to today’s Los Angeles Times.
Be very afraid Australia, even if it’s not part of your national character. It’s not the sale of national icons or assets that bothers us. We are deeply suspicious of the idea of “public ownership.” It’s the looming financial disaster that worries us.
Pirate equity is fueled by borrowed money. Borrowed money is fueling rising stock prices. It’s another, more sophisticated version of a debt-driven asset bubble. And all bubbles burst. Today’s boom may be tomorrow’s bomb. Tick, tick tick…
Over to Bill Bonner, in New Orleans Louisiana, still struggling to rebuild from Hurricane Katrina:
“Does that make any sense?”
Our tour guide in New Orleans punctuated his disquisition with this question so often that we began to suspect it didn’t.
“New Orleans is different from any other city in America,” he began. “While the English were setting up colonies on the East Coast, the French were building a model city right down here. They picked the best land, right here in the French Quarter, to build the city. And they warned that if we ever built beyond Rampart Street, which was the edge of the Quarter, we would regret it. And so what did we do? We went way beyond Rampart Street. We built just where the French surveyors said not to. Now, does that make any sense?
“Look at these buildings. You see, I like architecture, so I take care to look at these things. First, here in the Quarter the houses are jammed together without front yards on very small lots. Why did they do that? Because there wasn’t enough good land on which to build. And look…the houses here have very high ceilings. Why? Because it was very hot and humid down here and the high ceilings let the hot air rise. And look at the windows on these old buildings. They go almost all the way up to the ceiling. They’re vertical, not horizontal. Why is that? Because it allows the air to circulate better.
“Now when we get out of the French Quarter, we’re going to see how the Americans built their homes. You’ll see that they built not only on low land, but with low ceilings and low windows. Does that make any sense?
“Now, we’re going to drive over the bridge and over to the famous 9th Ward. You can see on your left where the levee gave way. Eyewitnesses say a wall of water came down the river here. Now, look what happened. Near to where the break occurred, the houses were practically wiped off the face of the map. See the vacant lots? And there were walls knocked over…the force of the water was so strong that it knocked down houses and picked up school buses. You know they’re finding school buses in the Gulf of Mexico now.
“And look at the sides of the houses that are still standing; you can see how high the water got – from six to nine feet. See how yellow those stains are? The water was contaminated with all sorts of things. And look on the sides of the houses. See how each one has been sprayed with a series of letters and numbers that tell rescuers what is going on in the house, if there are any bodies inside…alive or dead…and pets, and if they left anything for them? ‘F&W’ means ‘food and water.’ All told, the death toll is probably about 3,000 people.
“This whole neighborhood is a ghost town. All the houses have been torn down…or stripped. And look, there’s Fats Domino’s house. We thought we’d lost him. But he stayed in the house and survived. A few people have come back and are living in trailers. But these people are poor; they don’t have the money to rebuild. And they probably wouldn’t want to rebuild anyway…because who wants to spend a lot of money in a neighborhood that looks like it will be abandoned forever? They could pour a lot of money into the place and it might still be worthless. Does that make any sense?
“And if you wanted to rebuild, you’d have a hard time getting an electrician or a plumber – they’re all busy. And then, you’d pay a fortune for flood insurance. I mean, who wants to offer flood insurance to people who live below sea level? Does that make any sense?
“Now this next neighborhood is more middle class,” our guide continued. “These people are mostly Sicilians. They don’t give up. You can see that they’re rebuilding here. There’s one fellow who’s building his house up off the ground. There’s a guy with some brains. But most people are just pouring slabs of concrete and building just as they did before. Does that make any sense?
“They’re getting some help from the government. But I have to tell you, the government has been a total failure down here. All they do is put up those stupid, ugly trailers… the FEMA trailers, they’re called. They cost the government $60,000 each, even though you can get the exact same model for only $17,000 on the open market. They’re supposed to be temporary, but I know they’ll be here forever. And look on the roofs of some of these houses. See that blue plastic that covers many of the roofs? Well, that’s from the government too. It costs the government about $1,000 to put that on a roof…and then they have to replace it every three months. But you can go to any Home Depot and get the same thing for less than 200 bucks. I tell you, they’ve spent billions of dollars, but it hasn’t done much good for the people who live in New Orleans. Does that make any sense?
“Meanwhile, the mayor is going to Houston and Baton Rouge trying to get people to come back to the city. What he wants is for the poor blacks to come back – because those are the people who vote for him. New Orleans used to be a predominately black city… but since so many blacks left and haven’t returned, it’s a white city now. Does that make any sense?”