Thursday, October 29, 2009
I compare our current economic times with a massive hangover. If there's one thing I learned after my 4.5 years at LSU, it is that a great party is always followed by a bad hangover. I would surmize that the "fun" and the "hangover" have a linear relationship. You can't just have the fun without the pain to follow. That's "natural law" of alcohol consumption.
We have to go back to 1982 to really understand when and how this party really started. Bartender Ronnie known by most bar patrons as "The Gipper" kicked the party off with a nice happy hour. Drinks were 2 for 1 and the party quickly kicked into high gear. Bar owner at the time, Mr. Volcker, loved the happy hour concept. Getting the patrons drunk early led to great revenues later in the evening.
When Ronnie announced that his time was up, the bar patrons asked for a bartender just like him. In steps George I who had all intentions of continuing the party. Unfortunately, the bar was sold just prior to Bush I starting his shift. Early in the bar ownership, Mr. Greenspan was more cautious with his drink specials. In 1987, a patron drove home drunk, crashed, and sued the bar.
Due to George's limitations, the bar patrons asked for a new bartender. In steps Bubba. He knew what the patrons liked. He restarted the cheap drinks and threw in a few dancing girls and free cigars. The party went into overdrive. Everyone was intoxicated and the drinks kept pouring and pouring. The law only allowed bartenders to serve for so many hours, so in steps new bartender George II.
At first, the patrons were cautious, but after seeing him beat up some unruly patrons, everyone got on board and the party continued. Bar fights started to breakout more often during George II's shift, but the alcohol kept flowing so the crowd continued to dance the night away. The bar ownership had changed one more time, but the new owner, Mr. Bernanke, promised that they were going to "party like it was 1999!". To deal with the fighting thugs, he just hired a bunch of massive bouncers to keep the crowd in line.
Some wise patrons decided that they had consumed enough for one night and they departed for home. The bar just didn't feel the same to them anymore. While they missed out on the wildest part of the night, they travelled home safely and quickly relaxed in the comfort of their home. George II, like Bubba, had to end his shift, but the remaining patrons were about to kick it up one more notch.
The new bartender, Barack, shows up and announces "tequila shots are 2 for 1 for the rest of the night!". Many hours into the partying, the patrons are so intoxicated they don't know right from left. Tequila is pouring everywhere and the bar is in high gear. Dancing and singing, the patrons don't want the night to end. Barry was so cool of a bartender, that he even drank beer with the patrons.
Without warning, the lights come on, and someone announces on the PA system, "last call for alcohol". There's a frenzy as everyone races to the bar to get one final round of tequila from Barack. Due to the limited time left, there is a lot of pushing and shoving. Everyone knows that all won't be able to sip one final round of tequila, salt, and lime. One patron yells, "one more body shot please!". The bar finally closes. Being daily savings time night, it was able to stay open one extra hour. One extra hour of tequila seemed like a great gift at 2 a.m.
At 3 a.m. the real partiers headed for their cars and the drunken ride home. Two were killed as they crashed head-on into a tree. Most were blessed to arrive home safely despite their inebriated condition. Sleep came and lasted well into the next morning.
As the bar patrons awoke, their head throbbed, and their muscles ached. Their mouths were so dry, they hardly could speak. They quickly questioned the decisions from the night before. One yelled "Why did we do those tequila shooters?". The other yelled back "Why did we do four rounds of those tequila shooters?". The third yelled "because it tasted good my friends!".
As the day wore on and the hangover continued, some started to get angry at the bartenders from the night prior. "They knew we were drunk. Why would they keep serving us?". Another stated "That last dude Barack should have never sold tequila shots 2 for 1. How could we pass on that?". "Yes, it's his fault one said to another. He just wanted to make the bar more money. He took advantage of us.".
Amazing to all, the same crew ventured into the same bar the next night. They didn't seek out the tequila, but they quickly shifted back into party mode. The weekend consisted of two nights, and they wanted to get their share.
So I ask, when will we hear "last call for alcohol!". Be proactive and head home from "the bar" early. Take some tylenol before bedtime and drink a lot of water! The party was fun and we all took part. Blaming the last bartender is cowardly and irresponsible. If you want to blame any, you have to blame them all. Remember, it all started at 2 for 1 happy hour. Don't blame the bartenders for your own decisions.
"A stranger was seated next to a little girl on the airplane. He turned to her and said, 'Let's talk. I've heard that flights go quicker if you strike up a conversation with your fellow passenger.' The little girl, who had just opened her book, closed it slowly and said to the stranger, 'What would you like to talk about?' 'Oh, I don't know,' said the stranger. 'How about nuclear power?' and he smiled. OK, ' she said. 'That could be an interesting topic. But let me ask you a question first. A horse, a cow, and a deer all eat the same stuff - grass. Yet, a deer excretes little pellets, while a cow turns out a flat patty, and a horse produces clumps of dried grass. Why do you suppose that is?' The stranger, visibly surprised by the little girl's intelligence, thinks about it and says, 'Hmmm, I have no idea.' To which the little girl replies, 'Do you really feel qualified to discuss nuclear power when you don't know crap?"
Wednesday, October 28, 2009
Tuesday, October 27, 2009
Monday, October 26, 2009
"As for gold, we don't hold gold in the hope of making a killing. We hold gold because gold is our safety net. The economic world is composed of debt and leverage. Even the US dollar is a product of debt. Only gold is pure wealth with no debt against it. Gold can't go bankrupt since it represents pure wealth. By the same token, diamonds represent wealth and Picassos represent wealth. The difference is that if you want to sell a diamond or a Picasso painting, there is no posted price for either. To sell a diamond or a Picasso, there's no bid or ask price -- you have to find an interested buyer."
Sunday, October 25, 2009
Saturday, October 24, 2009
"One of my central contributions centers on the idea that it is our monetary system itself that is out of step with reality. Everything else we see around us economically is merely a symptom, while the cause of our current and future ills is the dependence of our monetary system on perpetual exponential growth. A profound and important set of conclusions immediately result from the acceptance of this argument."
The entire article:
Friday, October 23, 2009
Thursday, October 22, 2009
Susan Boyle beats out U2, Springsteen to become Amazon’s biggest pre-sales seller of all time
By Niall O'Down
"I hate to say I told you so yet again – but Susan Boyle made me do it.
Take a bow one more time all the Susanites out there. You really deserve it. Amazingly, Susan Boyle just beat out Bruce Springsteen, U2, the Dixie Chicks and Coldplay over at Amazon.com. Amazon announced today that "I Dreamed a Dream" is the largest selling CD pre-order in the history of the Amazon.com music store."
Here is the list of the top 10 bestsellers:
Susan Boyle, "I Dreamed a Dream" (2009)
Norah Jones, "Not Too Late" (2007)
U2, "No Line on the Horizon" (2009)
Bruce Springsteen, "Magic" (2007)
Dixie Chicks, "Taking the Long Way" (2006)
Coldplay, "Viva La Vida" (2008)
U2, "How to Dismantle an Atomic Bomb" (2004)
David Cook, "David Cook" (2008)
Diana Krall, "Quiet Nights" (2009)
Clay Aiken, "A Thousand Different Ways" (2006)
Our company had two projects with Enron subsidiaries and it was interesting to watch the rapid ascent and subsequent collapse. It's always fascinating to see how a corporate culture adopts the attitude and personality of the leadership team. Enron was a very arrogant company even before they became famous for it. Drinking your own "Kool Aid" can be toxic. They were Houston's darling and even put their name on our new baseball stadium. All appeared to be well until their ultimate collapse.
Many other ice sculptures eventually melted too...Tyco, Worldcom. Why does collapse always seem to surprise us?
Wednesday, October 21, 2009
Claus Vogt, Weiss Research Inc.
Source: Weiss Research Inc.
Tuesday, October 20, 2009
LOS ANGELES, California (CNN) -- "Miss California USA officials want Carrie Prejean to repay $5,200 they say she borrowed to have her breasts augmented last year. Carrie Prejean has been immersed in controversy since her response at the Miss USA pageant in April. The demand was a response to a lawsuit filed by Prejean in which she claimed pageant officials violated the former beauty queen's privacy by acknowledging to reporters that her breasts were fake. The truth about Prejean's breasts "ceased being private during the swimsuit competition of the nationally televised Miss USA pageant, in which Ms. Prejean walked the stage in a bikini," pageant lawyers said."
I was playing tourist one Saturday and took the tour of the castle. At one point on the tour, we were standing next to one of the walls looking over the edge and the tour guide stated "it was at this location over a ten year period that two hundred witches were thrown over the wall to their death in the bogg below." One of the tourists yelled "what happen to the witches after the tenth year?" The guide quickly responded "I guess that they all disappeared!"
It's interesting to watch "the shift" occur live. After crossing a significant inflection point in the year 2000, we have seen a downward trend in mass social mood. Aligned with this shift, we've seen many witch hunts. Suddenly there are witches everywhere! The SEC is chasing the bad guys. The CIA is chasing the bad guys. The U.S. military is chasing the bad guys. Right wing Christians are chasing the bad guys. The tea party protesters are chasing the bad guys. Rush, Sean, and Ann are chasing the bad guys. The amazing aspect is that when mass social mood is trending upward, the witches don't seem to be that bad. Ask Clinton, OJ, and Madoff about that.
If I could, I would ask the castle tour guide, where have all of these witches suddenly come from?
"Bear markets bring recrimimation. Practices that were routine during the bull market suddenly become vilified. We cannot say exactly who the culprits will be this time, but they will probably be some of the most successful and aggressive exploiters of the old uptrend. In the interest of justice, (and the enformcement of a whole new social mood), many will be punished. Investors are itching for a fight. Soon, charges of manipulation and the need for reform will be flooding out."
Monday, October 19, 2009
Sunday, October 18, 2009
Saturday, October 17, 2009
"But contrarians usually don't take the easy route ... they're accustomed to swimming against the stream. And they rarely make friends by doing so. Instead they expose themselves to mockery when they're wrong and to wrath and envy when they are right. In fact, there's a risk with always being a contrarian. Contrarians may be early with their timing. For that, they will be laughed at. But they don't mind ... they know that they'll eventually be proven right. They know that imbalances and the madness of crowds can go on much longer than anyone can imagine ― so they wait for the unavoidable to happen. Hence contrarians need patience and discipline. They have to have the guts to try again and again to finally catch a major trend change." Claus Vogt
“First they ignore you, then they laugh at you, then they fight you, then you win.” Mahatma Ghandi
Friday, October 16, 2009
Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds
Thursday, October 15, 2009
Chris Martenson www.chrismartenson.com
I once again turn to the theory of "mass social mood". U.S. debt rises from $26 to $52 trillion during the Bush administration and there are no tea parties. No protests. No communists nametags. No socialist remarks. No threats. No angry town halls. Isn't that interesting?
While the cycle "turned over" in the 1999-2000 timeframe, the "momentum of the mood" is just gaining steam. A few trillion of debt additions this year and the mob is seeking a lynching. Prior to the Obama administration taking office, the U.S. had $54 trillion of underfunded obligations. Why is Team Red just getting mad now? Why didn't they get mad at Bush? Why weren't Rush, Sean, and Ann lashing out at Bush for not dealing with this massive debt obligation? Why were they okay with increasing it by $26 trillion over 8 years?
I loved this lead in video played on the screen before "The Streets Have No Name".
Wednesday, October 14, 2009
"This week (ending 10/1/09), despite the massive run up in stock over the past few months, despite the outrageous amounts of bailout and stimulus money applied, despite every attempt to put a positive spin on things, jobs continued evaporating, auto sales slumped to multi-decade lows, bankruptcies soared 41% over the prior year, and tax receipts continued to slide. States such as California are sliding into fiscal chaos, and some, like Michigan and Alabama, are already there."
"We are about to enter another leg of the downturn, and this one will be even bumpier and more uncertain than the last."
I continue to encourage everyone to read Chris' CRASH COURSE:
David Rosenberg - Gluskin Sheff
-20 percent against the Chinese renminbi (or yuan),
-21 percent against the Singapore dollar,
-25 percent against the Thai baht,
-31 percent against the Indonesian rupiah,
-And 43 percent against the South Korean won.
That's a distinct position of weakness for the Japanese because it makes their exports significantly more expensive than their Asian competitors'. Of course, this is horrible news for an economy where exports make up 16 percent of total output! And even with improvements in the global economy, Japan's exports are still down 37 percent from this time a year ago. This is why Japan has experienced the worst contraction of all major economies and is expected to have the weakest recovery. And that's why there is speculation that Japan could return to recession — as soon as the fourth quarter of this year.
Tuesday, October 13, 2009
“The costs of a dollar-dominated system to the world may have exceeded its benefits. The dollar should ... be replaced by a new global reserve currency.”
Zhou Xiaochuan - China’s Central Bank Governor“Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability.”
Dr. Detlef Kotte - Director of the UN's Macroeconomics & Dev. Policy
Monday, October 12, 2009
Random Roving – 2/28/09
Martin Weiss - Weiss Research Inc.
Sunday, October 11, 2009
With a frame of reference of mass social mood, it does make a lot of sense. Early in the contraction phase, the dissatisfied voted for "change". The "euphoria" associated with that change will soon wear off and overwhelm the same herd that originally wanted the change. Stay tuned.
Saturday, October 10, 2009
"Never swing first, but if he swings at you, knock his lights out."
Robert F. Barrell
"Humanity should question itself, once more, about the absurd and always unfair phenomenon of war, on whose stage of death and pain only remain standing the negotiating table that could and should have prevented it."
Pope John Paul II
Can our initial and continued efforts in Afghanistan be categorized as "self-defense"?
Can any of our efforts in Iraq be categorized as "self-defense"?
And now, Iran??
Friday, October 9, 2009
Julian Robertson, Tiger Management Corp. - CNBC Interview
Thursday, October 8, 2009
For a zoomed in look of the ratio (1980-Present), see the chart below. My October 1 post on "the rhyme" illustrates how the media along with the politico's, keep you heading for a big head fake.
Are we currently at the "head fake"? It's been an amazing run since March 6 and The Confession.
Wednesday, October 7, 2009
For the entire article:
Tuesday, October 6, 2009
Monday, October 5, 2009
Sunday, October 4, 2009
Check it out:
Saturday, October 3, 2009
Random Roving, Nov. 4, 2008 - Election Day Morning
"Publisher HarperCollins said Palin's memoir, titled 'Going Rogue: An American Life', would be published on November 17 after originally being scheduled for release in spring 2010. The book will have a large first printing of 1.5 million copies, according to a statement from HarperCollins, a unit of Rupert Murdoch's News Corp." Reuters
Sources say that she's inked a $7 million deal. Only in America!
Why do men appear to lose restraint when they occupy the position of power?
Friday, October 2, 2009
Richard Russell, The Dow Theory Letters - 9/28/09
Thursday, October 1, 2009
Today the Associated Press reports:
"The Secret Service has determined that a juvenile was behind the online survey that asked whether people thought President Barack Obama should be assassinated, an agency spokesman said Thursday. No criminal charges will be filed against the juvenile or the juvenile's parents, spokesman Edwin Donovan said. Donovan would not identify the names of the child or parents or say where they are from. The poll, posted Saturday on Facebook, was taken off the popular social networking site quickly after company officials were alerted to its existence. But, like any threat against the president, Secret Service agents took no chances. The poll asked respondents "Should Obama be killed?" The choices: No, Maybe, Yes, and Yes if he cuts my health care."
"Obama has a bright future. I hope for his sake that he loses, because he will be the “fall guy” and historically during “inflection points” those presidents have been the recipients of bullets (Lincoln, McKinley, Kennedy, Reagan). The 'mob' has emerged and they’re seeking someone to lynch (ask Martha Stewart, George Bush, Jeff Emmelt, Ben Bernanke, and Brittany Spears)." Random Roving - June 30, 2008