Your editor is trying to catch up with financial market news while fighting off jet lag from a 26-hour trip. For the full Aussie market wrap—we suggest you head on over to Money Morning to hear from Kris Sayce. Meanwhile an observation on the American Press we made while waiting at the gate in San Francisco yesterday.
You forget how stupid they are. According the cable news, the biggest story in the U.S. is not Hurricane Gustav, the on-going collapse of the housing market…but the apparent pregnancy of the 17-year old daughter of the Republican candidate for Vice President. The Republicans convene in Minnesota this week. At least with the Democrats it wasn’t on TV in Australia. Our first action last night? We unplugged the TV.
It’s Labor Day here in America. Markets are closed. Even the streets of downtown Baltimore are quiet. For one, it’s too hot to be outside and actually moving. It’s a wet heat here on the mid-Atlantic. But we suspect everyone has headed off to the beach or the suburbs to get away from the city.
It gives you a chance to take a good look at the city Centre, or Mt. Vernon as it’s called. It’s a beautiful example of 19th Century architecture and urban planning. Baltimore used to be a rich city, where the ocean met the rail road.
It was a fortunate crossroads that produced a lot of wealth and a lot of the beautiful old buildings in the neighbourhood. The Baltimore and Ohio railroad (remember that from Monopoly) hauled raw materials industrial goods from America’s interior to the harbour. And off they went to Europe.
America was the great deflationary force of the 19th century, but it was not for finished goods (as is the case today for China) but more for raw materials like wheat, corn, timber, coal, steel and later, oil. The country made goods, added some value, saved, and invested. Wouldn’t you know it? This kind of economic behaviour is what led to higher wages and better standards of living in England during its industrial revolution. It worked for America too!
Other port cities opened for business in 20th Century, stealing away Baltimore’s market share. The whole life of the city—physically and culturally—began a slow-motion decline. A great ‘white flight’ saw mostly white families leave the city for the suburbs, where you found a reasonable simulation of country living without the growing problems of drugs and crime in the city (although we’re pretty sure there were plenty of drug problems in the suburbs too, but they involved more using and less dealing.)
Besides, the great post-war booms in Korea, Japan, and Germany saw more manufacturing move away from America’s east coast to other shores. When your editor moved to Baltimore in 1997, Mt. Vernon was full of boarded up buildings, transvestites, and drug dealers.
It was charming in its own way, and the rents were cheap. It’s been steadily improved, if you can call it that. New storefronts for wine and coffee shops have replaced the old beaten-down row homes. Students pretend to read assignments in the park. And sometimes the students from the nearby Peabody Musical will bring a cello or violin to the park on Mt. Vernon Square and play for free, and usually pretty well.
for The Daily Reckoning Australia