Scientists report finding a big hole in the universe. We’re not surprised; we thought something was wrong.
“You don’t want to spend the evening alone, do you?”
The question was put to us by a blonde woman, attractive, about 35-years old. The honest answer was ‘no, we’d prefer some company’. But there are times for truth…and times when lies pay off.
“You are very kind,” we replied, “but no thank you.”
We knew what she was selling. She was standing on the south side of the Arc de Triomphe at 10 PM…waiting for a customer. The companionship she offered would have been very welcome. So would the carnal intimacy, for that matter. But we have our principles.
Yesterday, the Dow fell 280 points and we went to visit our old friend in the Hospital Pitie-Salpetriere. “Mercy Saltpeter” seems like a strange name for a hospital, but that is the fact. The place is a city within the city of Paris, with streets, buildings, parks, courtyards, parking garages and so forth. It is also a very quiet and very pretty place, as there is no traffic to speak of.
“Bill, how are you doing?” said our friend.
“Better than you,” was our reply.
He had lost 20 pounds in the last two weeks…since the cancer was discovered. He looked cadaverous. But he was in a good mood.
“Yes, cancer has been very good for my marriage,” he explained. More tomorrow…
These thoughts and remembrances all flashed through our mind this morning…as we sat in a café near the office.
Reading the paper, we discovered that the Dow took a biggish hit on Tuesday. It is still not clear what the stock market intends to do. We’ll just have to wait to find out.
But anyone who would put money into US stocks, generally, deserves what he gets . Stocks have gone nowhere for the last seven years. That means they are still expensive. The correction that is coming hasn’t yet come. Which means, it hasn’t yet gone either. Our guess is that the next seven years will be even worse than the last seven…as the correction finally does its work.
Our money is still on gold to save the day…at least for those who have turned to the precious metal as a form of wealth insurance. Remember, gold can’t be printed out of thin air – and it will always hold value. And what’s this…the yellow metal is up on weaker dollar sentiment today? Seems like now is as good a time as any to pad your portfolio with gold…
Oh…and here’s an interesting item. Remember, the present economic system is not capitalism…it’s a kind of Marxism for rich people…in which the elite make the profits while the losses are redistributed, shared throughout the entire population like Mao jackets and influenza. The genius of the present system is that it dupes the masses into thinking they are capitalists, making it possible for the speculators and hustlers to offload their risks onto them.
You can see how it works by looking at the mortgage industry. Lenders make a profit by writing mortgages…the mortgages get sold on, repackaged, and bought up by hedge funds, insurance companies, and even pension plans. There are more than a trillion dollars worth of CDOs around and about. No one knows exactly who loses money when they go bust because the downside has been socialised…spread to the masses. In the old days, the banker who provided the mortgage loan would have taken the loss when it went bad. Not today. Now, it’s likely to be a retired teacher in Anaheim…and millions of other make-believe ‘investors’ just like him.
Likewise, the LBO mavens make a fortune in fees. Ultimately, their creations are taken up by the lumpeninvestoriat . Again, the dealmakers and speculators take their profits…and then the risk of inevitable loss – when the stock goes down – is borne by average investors.
And when the speculators get in trouble, the feds rush to their aid with liquidity – more cheap money.
But wait, the problem at the heart of the economic system is not a lack of credit…it’s that too much easy credit has loaded too many people and too many deals with too much debt. More credit just postpones the inevitable loss…which, as we’ve been saying, will not be suffered by the capitalists who caused it…but by the masses.
The Daily Reckoning Australia