Sunday, November 15, 2009


A couple of guys sitting with me at the trading desk posed a question the other day: are girls sluttier today than they were ten to twenty years ago? Duh. They obviously hadn't watched MTV, VH1 or BET lately. The sluts on those channels aren't just naughty, they're nasty; you can't help but imagine that their privates are petrie dishes teeming with all sorts of STD's. Reality shows and talk-gawk shows like Jerry Springer revel in today's Slut Cult. "I'm just seventeen years old, Jerry, and I'm not a bit ashamed of having a threesome with my step daddy and that guy what's-his-name who lives in the next trailer over." Every prime time sitcom has a teenage chick who would make Lolita blush. I bet even wholesome Miley Cyrus is under pressure to get a pair of fake tits and to start showing some skin now that she's at the ripe age of sixteen. Our present day culture gives the impression that if you are a sixteen year old dude and you're not at least getting regular bj's from your girlfriend, then you must be getting them from your boyfriend.

Have you been to the mall on a Saturday afternoon? It's a passing parade of bare midriffs showing some tacky navel jewelry, and jeans so tight and low that you can see the girl's thong and ass crack. And the tattoos. I don't get the tattoos that I see young women adorn themselves with today. When I was a youngster, sluts wouldn't have countenanced the thought of putting a tramp stamp across their lower back. The only people who had tattoos back then were sailors, bikers and carnival freaks.

So why are girls sluttier today? I suppose the easiest answer is that this is all just a natural consequence of the 1960's Sexual Revolution. Of course, the hippies back then never imagined themselves having children, so it was easy to espouse "If it feels good, then do it" as a moral code. I know a few former hippies who are now middle-aged parents and I love to watch them cringe when somebody mentions how blow jobs parties are the big thing among middle schoolers nowadays. Reap what you sow, man. Blow jobs do feel good, right? Then why shouldn't kids do it?

The Age of Feminism also did a lot to encourage women to at least display as much horniness as men, even if they weren't as horny. Thanks to the Women's Lib credo that women have as much right as men to behave badly, you can draw a straight line from Gloria Steinham to Brittany Spears, a straight line on a decidedly declining angle. The message, everywhere and all the time, is "You go, girl. Hooking up is fun to do!" (For those of you not in-the-know, "hooking up" is a euphemism for casual, no holds barred, no questions asked sex.) It gets even more flagrant in college with condom machines and co-ed bathrooms in the dorms; college administrators are going out of their way to tempt their students to get it on.

The irony is that Feminism would seem to argue against women being sexual objects. Wasn't that one of the original guiding principles behind the movement? I guess these later libbers like to think that women should be as sexually aggressive as men, be an equal partner. But let's be honest here, ladies, excuse me, women (the term "lady" is a relic from a patriarchal past), the sexual act itself is inherently one that presupposes dominant and passive roles, a subject and an object. One person is entering while the other is being entered. There's the penetrator and the penetratee; the screwdriver and the hole that the screw is being screwed into. We can tweak the rules of the game a bit, like who's on top, but it's still a matter of who's pitching and who's catching. The pitcher is always the dominant player.

Bill Clinton also helped to slutify the zietgeist. His revolutionary claim that getting a blow job from a nineteen year old intern did not constitute a sexual act gave the green light to teenage girls across the nation that "giving a Lewinsky" was ok, even kind of cool. Teenage boys everywhere owe a great debt to their President for that contribution to the onward march of youthful lasciviousness.

Ah, to be a teenage boy in this day and age. I'll admit that when I was that age all I thought about was "getting some action." As Meatloaf sang about in Paradise by the Dashboard Lights, rounding the bases was the goal every guy had in high school. Doesn't "getting on base" sound quaint nowadays? Getting a hand underneath a bra, or getting on second base, seemed about as hard as getting a double off Roger Clemens. Nowadays it seems like all the young dudes hit a grand slam every time they get at bat. I kept my virginity up to the 12th grade when I lost it at some Halloween party to a lady ten years older than me at one of those "adults only" apartment complexes that were the fad back in the seventies. I stayed a virgin up until then but it sure wasn't from lack of trying to lose it every which way I could.

And think of the porn that kids today have access to. The Internet offers a full menu of free porn and the only hurdle that a teenager has to get over is the pop up question asking the user to certify that he or she is at least 18 years or older before entering the site. What a difficult moral conundrum this must present to Johnny Hardon. When I was in middle school the only stimulus I had to get off on were the bra advertisements in the newspaper. Later on, I'd pop a woody at the scent of a newly purchase magazine because it reminded me of the newly purchased Playboy that my older brother always managed to procure each month.

I have a nine year old daughter and I have already prepared the speech that I plan on giving her when she gets to middle school. "Sweetie, believe it or not, I was once a 13 year old boy. And there was only one thing I thought about and that was taking advantage of a sweet, innocent girl like you. Not that that's necessarily bad, that's just the way boys are. You know those nice porter house steaks that I grill every Sunday evening for dinner? Well, that's how those boys are going to be looking at you, like nice thick steak to be devoured. Now, you don't want to be devoured like a piece of meat, do you, sweetie?"

I'm hoping the answer she gives me is, No. But nowadays, God help me, you never know...

Sunday, November 01, 2009


With two days to go before the NJ governor's election and the race basically a dead heat between Corzine and Christie, I'll go out on a limb and make a prediction: Christie will lose. My prediction is based not on the pusillanimous campaign that he has run, or the votes that Daggett is sure to steal from him, or the fact that NJ has traditionally been a Demo state. Christie has the ability to overcome these negatives. Remember, a couple of months ago he had a comfortable lead over the unpopular Wall Streeter, Corzine. How can anyone really get excited about Corzine, who comes across as an smug, aloof college professor who inherited a substantial trust fund. The race has always been Christie's to lose.

The reason that Christie will lose is that he's fat.

Fat people evoke mixed feelings, positive and negative. Jolly is a positive word that we usually apply to fat people, i.e. jolly old St. Nick. We often think of fat people as fun, funny, rambunctious, like Falstaff, Fatty Arbuckle, John Candy, John Beluschi. We all have that fat friend whom we tend to call when we want to have a few beers and a slab of baby-backs while catching a game at the local sports bar. Yet, this stereotype of a fat person has at the same time a negative connotation of being undisciplined, slightly out-of-control, liable to hurt himself and others. Again, think John Candy, John Beluschi, Chris Farley, all three of whom died young from insatiable appetites that led to self-destruction. Fatty Arbuckle was America's favorite clown until he got charged with raping a young starlet. Lack of self-control can sometime be laughable, but also scary, pitiful. And that seems to be the common denominator that underlies our perceptions, both positive and negative, of fat people; namely, they are undisciplined slobs.

History shows that we rarely elect a fat person to office. Reports claim that a third or more of Americans are obese, but how many obese congressmen can you think of? We haven't elected a fat President since Howard Taft, who was mediocre in everything but his prodigious capacity to eat. Al Gore dropped thirty something pounds when he decided to run for President because he knew that a triple chin would turn voters off. After losing to W., he evidently ate his sorrows away, his face taking on porcine features like squinty eyes and fulsome cheeks.

Maybe the reason that we don't elect fat people to office is that we see in them too much of ourselves, or at least too much of what we don't like about ourselves. As much as we hate to admit it, we know that Europeans are on to something when they accuse us of being self-indulgent, spoiled, conspicous consumers. The Pursuit of Happiness has it darker outcomes, among which are those extra twenty pounds around the mid-drift.

Corzine's campaign ads sublty take advantage of Christie's "portly" physique by displaying full length photos of him in all his slovenly glory. One ad accuses Christie of "throwing his weight around."

The great irony of this campagin will be that Christie lost because he didn't have the guts to trim down his gut. Okay, that pun was too thin by any measure.

Monday, October 12, 2009


Why do people say "God bless you" when you sneeze within their hearing distant (not to mention within spray distance). No matter where you might be, like on a train for instance, some total stranger two rows back happily asks God to bless you just because you go a-schwew. The sneezer is blessed even when he fails to cover his mouth and risks infecting the whole bus.

Why would God give a damn that I sneeze? I read once that this practise goes back to Medieval times when people thought that every time a person sneezed, a little bit of that person's soul escaped his body. Okay, that's a quaint notion but last time I checked we are living in the 21st century.

Why would a person bless a total stranger? What if the sneezer was an atheist who might be offended by the proffered blessing. What if the sneezer was evil, like a child molester or murderer? Would you bless Bernie Madoff if you heard him sneezing in the cell next to you? Conversely, why should I accept your blessing? For all I know, you too could be a child molester or murderer whose blessing isn't worth the expenditure of breath. In my book, strangers shouldn't bless strangers nor should strangers accept blessings from strangers. It's a wicked world out there, so you have to be judicious about throwing blessings around or accepting them willy-nilly.

I'm further annoyed that this elevation of sneezing to a religious matter puts pressure on me to bless someone who sneezes in my vicinity. I usually don't offer my blessings, but I can't help feel a slight twinge of guilt from breaking a social custom; and I don't like feeling guilty over a sniffle.

Okay, I admit that I'm coming across as some sourpuss Andy Rooney curmudgeon. The sociologist in me recognizes that little acts of civility, kindness, graciousness are the glue that keeps our frenetic, borderline schizofrenic society intact. As Guiliani proved in bringing down NYC's crime rate, it's those little acts of incivility, petty crimes, blatant disrespect for the law that create a culture of complacency which accepts more serious crimes as just part of the landscape. On the flip side, displays of politeness and consideration for others help create a milieu of social amity.

For example, have you noticed how more often than not, men allow women to enter and exit elevators first? This little remnant of chivalry exists despite the Age of Feminism which sneered upon such patronizing, "patriarchial" behavior. Every once in a while, you'll even see a gentleman give up his seat to a lady on the subway or bus. (It's a shame how even the words "gentleman" and "lady" seem to be relics of a bygone era.) Along the same lines, in certain parts of the country, particularly the South, it's customary to wave at people for no particular reason, even if they are total strangers.

I guess this Gesundheit tradition is part of the same effort, sometimes desperate, to just get along with one another, to paraphrase that famous humanitarian, Rodney King. For that reason I'm willing to bear with it and not say to the person who happens to bless me when I sneeze, "Mind your own business, bud."

Saturday, October 03, 2009


Remember that sappy MASH theme song? Not only is suicide painless, but it can even be funny in a mordant sort of way. If you think that I'm being insensitive, then read THE WALL STREET JOURNAL article dated September 15 about workers at France Telecom. The company has been afflicted by a rash of suicides among its workers, numbering 23 over the past 18 months. The unions were quick to jump on this stat as evidence that the company's restructuring efforts caused these employees to jump out windows, slash their wrists, fall in front of trains, etc. The company, being chicken shit like most major corporations nowadays, accepted the union's claims and said that it will train all its managers to identify staffers showing signs of depression or erratic behavior. The company accepted these union assertions notwithstanding the fact that the incidence of suicide among the 100,000 France Telecom employees is less than the national average. But in a country like France, ruled by unions, facts don't really matter if it they somehow force it to acknowledge the real global economy, which France seems to think that it can serenely float above like a bloated dirigible.

Recent suicides among France Telecom workers include a 53-year-old employee who tried to end her life by overdosing on barbiturates and another worker who stabbed himself in the stomach during a staff meeting (that's a sure-fire way to wake everybody up). These workers had recently been informed that their jobs were about to change. Let me emphasize: They were not losing their jobs, they were not being fired; their jobs were being changed as a result of a long overdue effort by French Telecom to become at least as efficient as Telecom Italia.

These unsuccessful suicide attempts were enough for the country's labor minister, Xavier Dacros, to summon the CEO of France Telecom for a meeting as he was "extremely preoccupied by the situation" there. Unions called for Parliment to take action.

At France Telecom, 65% of its 100,000 employees have "civil-servant contracts," which basically means that they can't be fired even if they were caught embezzling company coffers or having sex with farm animals in the boardroom. As a result, the company can't fire dead-beat employees and instead has been asking them to change their traditional jobs repairing and installing fixed-line networks, for example, to working in call centers. Call centers? Scare le bleu! Such workers might have to even sell products such as cellphone contracts. Evidently some France Telecom workers would rather play Russian Roulette with a fully loaded handgun than accept such a fate.

"It has not been easy on the staff," a spokeswoman for France Telecom said. "We have asked them to enter a competitive market which is evolving very quickly." Poor precious darlings. We are not talking the Spartan 300 here, folks.

Since the company can't fire anyone and has nudged as many of its workers as it can into a cushy retirement paid mostly by the government, the company has tried to entice more workers to leave by helping them start their own businesses. The company is subsidizing everything from employee owned pizzerias to clothing boutiques. After the start-up fails, which most are likely to do, the employee ex-entrepreneur can rejoin the company at any time with a guaranteed job. And yet the union would have us believe that some workers would rather committ suicide than take this option.

According to a union spokesperson, the stress of learning a new trade, sometimes even in a new city (God forbid!), has proved too difficult for some of these delicate souls. Many workers, according to the union, don't have the necessary skills to work in call centers. Here again, I had to laugh out loud. And what skills might those be? How to operate a phone? Good phone etiquette? Some poor coolie in India can do it, but a Frog making ten times the amount that the Indian fellow does somehow just can't figure out how to do phone duty.

The union representative summed the issue up by saying, "Of course our company needs to restructure to function. But a business without compassion simply doesn't work."

Is this what the famous French joie de vivre has been reduced to, hanging yourself because you might have work in a call center? Maybe we shouldn't be so surprised by this French reaction to "workplace hardship;" we are talking, afterall, about a nation whose entire army deserted in the middle of WWI and that was a welcome mat for the German army in WWII.

Of course, this "issue" in all likelihood is just another piece of propaganda propagated by a union angling for more perks and benefits. Still, it says a lot about the French that the government and corporate establishment accept this claim so readily. No wonder the French economy has grown over the past 25 years at 50% less rate than the US economy. No wonder the French unemployment rate during that span has consistently been almost twice the US rate. Why would anyone want to hire such expensive crybabies?

France will alway be a lovely place to visit, but I sure wouldn't want to hire there.

Saturday, September 12, 2009


First off, let me confess that I'm mostly going through this exercise of deconstructing the Great Healthcare Debate for my own good. For months I have read and listened to all the arguments and commentary but have never felt that I have a complete lock on what it's all about. So bear with me as I think out loud and wander through the policy labyrinth. Let me also let you know up front that I'm a Republican who thinks the federal government is the most inefficient, incompetent, wasteful, lame brain institution that this nation has had the misfortune of being saddled with. I never cease to be amazed by the abiding faith that liberals put in an organization that makes decisions based not on what is rational and right but on political expediency. Moreover, how much can one expect from an institution that can fire a egregiously bad employee only after going through an obstacle course that requires the destruction of a ten acre forest in paperwork and can take so long that the bad employee will probably have retired on his cushy government pension by the time the dismissal papers are stamped.

With that said, here goes:

From what I gather, there are three main issues that Congress and the President are trying to address: 1) what to do about the uninsured 2) how to keep overall healthcare costs down 3) how to make insurance policies more user friendly in the way of being portable (i.e., can be carried from job to job) and open to all regardless of a person's particular health condition. This third issue is really not an issue because the insurance companies have basically agreed to make insurance portable and open to all, subject to an overall plan being passed that requires everyone to have insurance. The latter requirement is a boon to insurance companies as more people sign up for their plans, thus enabling insurance companies to be more generous with the terms of their policies.

The first two issues are somewhat connected in this way: those without health insurance do get health care, only they get it in the most expensive way, namely through the hospital emergency room. And because the uninsured are not able to afford preventive healthcare, their maladies often get acute before they make the visit to the hospital and thus require more expensive treatment. Ergo, getting more of the uninsured insured will help bring down the cost of our nation's aggregate cost of healthcare.

The notion of supposedly 45 million uninsured in the US demands clarification. First, of that number there are many millions who are eligible for Medicaid/Medicare but for whatever reason do not enroll. Second, there are many millions who can afford health insurance but elect not to buy it, like kids in their twenties who think they are invincible and don't want to spend beer money on health insurance. Finally, a significant portion of the uninsured are illegal immigrants, who will supposedly be excluded from any plan that gets signed into law. (The exclusion of illegals doesn't make a lot of sense to me. Okay, so taxpayer dollars will not be spent on providing insurance for this group. Great, so now private hospital dollars will be spent on this group's expensive use of emergency rooms. Are we as a society better off with the latter situation?) Some estimate that after deducting all the above subgroups from the 45 million, roughly 9 million are left who are legal citizens, who are not eligible for Medicaid/Medicare and who would like insurance but can't afford it.

Some argue cogently that providing insurance to the uninsured is about more than numbers and cost savings. We as a nation, they argue, have a moral imperative to provide health insurance for the needy. For those 9 million, I would agree. Nevertheless, those other 36 million uninsured present a economic/fiscal problem that can't just be waved away.

The bills floating around in Congress address the issue of the uninsured by mandating that everyone get health insurance, except the illegals. Those who can not afford insurance will receive subsidies from the federal government to buy insurance. These subsidies constitute most of the costs behind the $900 billion to trillion dollar estimates that number crunchers bandy about as the overall cost of universal health care. Lower the subsidies and you lower the overall cost but raise the number of people who will remain uninsured.

So there you have it, the financial logic of universal healthcare, the connection between issues one and two: universal insurance means that healthcare costs will go down. Yes, universal healthcare will cost the government as much as a trillion dollars over ten years, but once everyone is on a health plan and out of the emergency rooms, then overall health care costs will decrease.

Alas, there is a problem with this logic: No one believes that the above-mentioned putative savings will significantly offset the costs of the subsidies as no real evidence exists to support that presupposition. Consequently, Democrats have been scrambling to devise various tax/spending cut schemes to cover the cost of the program. Taxes could be raised on the wealthy. Taxes could be raised on "gold plated" health plans (unions have a problem with this since most of their health plans are super-deluxe). Fraud and abuse--eveyone's favorite twin bete noir--could be cut out of Medicare. Of course, one might wonder if fraud and abuse are so easy to cut, then why haven't government overseers done it already.

What most conservatives expect is that a plan will be enacted with no real means of paying for it and twenty years from now we will have another exploding entitlement to add to exploding Medicare and exploding Social Security and our government will be bankrupt in a way that not even the scariest scaremonger envisioned. The federal government has never been up to the task of inflicting the cost necessary to pay for its goodies. The federal budget deficit over the next ten years is expected increase by $9 trillion, even before taking into account the cost of Obamacare. Analysis show that both Medicare and Social Security are bankrupt by tens and tens of trillion of dollars.

But back to the story. So now the uninsured person has, thanks to federal government subsidy, the wherewithal to buy insurance. So where does he buy his insurance since either he's unemployed or his employer doesn't offer an insurance plan? The prevailing idea is that he will go to some sort of exchange where insurance companies will compete against each other to provide the uninsured with insurance. This is where the real fight is being fought, where the Gettysburg of the healthcare civil war is being waged. Liberals are insisting that along with the dozens of insurance companies participating in the exchange and offering plans, the federal government should have a plan of its own to put before the uninsured. This government plan has been dubbed the "public option."

President Obama's rationale for the public option is that it will make sure there is real competition to provide the best plan at the least cost and to "keep the insurance companies honest." Come again? At last count there was something like 1300 insurance companies in the US. Is that not competition enough? And since when is the federal government the repository of all that is "honest"? Conservatives suspect, and rightly so, that the public option that liberals are so adamant about is nothing more than the camel sticking its nose under the tent, the camel in this case a healthcare system totally run by the feds.

How will private insurance companies be able to compete with the federal government? Private companies will compete viciously with each other to offer the most popular plan at the least cost in the most efficient way so as to generate the most optimal profit. Liberals think of profit as a dirty word. But bottom line, profit is a measure of efficiency. The government has no concern about being efficient or cost sensitive. The government will be in position to offer the best plan at the cheapest cost because it doesn't have to worry about making a profit. It will generate huge losses in order to drive private companies out of the market. And who pays for the huge losses? Taxpayers of course. Obama knows the game and is being disingenuous, which is a Washington euphemism for dishonest, when he doesn't level with the American people that a government run plan is ultimate goal and the public option is a means to that end.

The real fun starts after the government has taken complete control of healthcare and we have a nationalized medical industry. Realizing that they can not keep running huge deficits from healthcare and can't keep soaking people in fees and taxes to pay for it, then government officials will have no choice but to either drastically raise the cost of healthcare in order to cut demand or resort to rationing. One other option would be to increase supply of healthcare, ie pay providers such as doctors and hospitals more so that more people would choose to become doctors and more hospitals would be built. But one only has to look at how Medicare operates to realize that this would never happen. Medicare underpays providers even below the providers' cost. Providers make up for this buy charging customers on private plans more than they normally would have in order to make up for the Medicare stinginess. It's a dirty little secret that one reason private health insurance premiums have run up over the past 25 years is Medicare's starvation of providers.

So back to issue 2, or healthcare costs. Obama hardly ever speaks about tort reform, even though anyone involved in healthcare will tell you that frivolous lawsuits have been a significant factor in the run up of costs. Malpractice lawsuits represent around 2% in direct costs from payouts but have an even bigger, indirect impact in forcing medical providers to practise "defensive medicine," which means ordering tests and procedures not because they are necessary but just to cover the provider's ass from some predatory lawyer.

Costs are also high because Americans, when it comes to healthcare, want high cost services and products. We want CAT Scans and MRI's. We want the best drugs available, even if they cost more. We want our 80 year old grandmother to get that operation even if it extends her life only by a year. Our demands are not cost-conscious and consequently our healtchare is expensive. HMO's a decade ago tried to put some limitations on demand but got lambasted to the point that Congress almost outlawed them. To me, no matter whether it's a private or public solution, the real knot is this whole debate is how to get Americans to accept less than the most expensive treatment and products and settle for what a cost-benefit analysis would show is the "optimal" treatment or product. Government doesn't have the balls to do it, and every time private companies a la HMO's have tried the hue and cry has been such that politicians rush in and abrogate any sane effort at cost effective healthcare.

One could argue that the private market does address the cost issue through pricing. Higher quality means higher pricing. Normally, the price mechanism works in the marketplace by tamping down demand. But our healthcare system is based on third parties paying the bill, so that a disconnect exists between the end user of the product and the price of that product. Republicans have provided different proposals to tie the end user of healthcare and the cost of that healthcare together so that price elasticity exists in the medical marketplace. But these ideas, such as medical savings accounts, have never moved from the fringes of the debate.

And after thinking this issue through out loud, I have circled back to the ultimate, underlying problem, which is that US healthcare costs are too high. A ramification of that is that too many people go without insurance because they can't afford it. But to really understand the problem, one has to ask why are US costs so high compared to other developed nations' costs. The simple reason is that Americans are spoiled. We want everything, we want the best, but we don't want to pay for it. We want the best brand drug, even though a generic is available at a much lower cost. We want a CAT scan even when a CAT scan is really not necessary; but we want it just to be extra sure. We want our 80 year old grandmother to get that expensive treatment even though it might extend her life for at most another year. We want pharmaceutical companies to keep coming up with those miracle drugs that cost billions to develop but we bitch about the high price of drugs. We want to be able to sue our doctor at the drop of a hat with the same hope we have when we buy a lottery ticket, a big payoff to send us into premature retirement. We want these things despite the expense because, thanks to our third party pay system, we don't directly suffer the expense. When's the last time you asked a doctor the cost of a procedure or prescription that he was proposing. We eventually come to recognize the expense when insurance premiums go up; insurance companies are the ones after all who have to pay the bill. Rather than connecting the rise in premiums to our expensive demands, we blame the mean ole insurance companies who are just out to make a profit, when in reality the insurance industry's profit margins are in the middle of the range compared to other industries.

So who's going to tell the American people that they can't always get what they want? The HMO's tried to and look how far they got. The federal government? Yeah, right. And single payer, federally run plan doesn't address this basic problem; instead of hundreds of payers, you have one. Other government run systems, like the UK's, do in fact address the problem by rationing. Get ready for the Second Revolutionary War if the politicians have enough spine to try that here.

Americans have high cost healthcare because that's what Americans want. When politicians try to bring costs down by taking away what Americans want, they find that the majority prefer rising costs and millions of uninsured to losing the prerogatives mentioned above. Bill and Hilary learned that in 1994 and Obama is about to learn the same leason.

Friday, August 21, 2009


Once again, we've had to suffer through another Woodstock redux. Ever since that epic party, the media, made up mostly by people who came of age during that time, forces us every ten years to stop thinking about less important matters such as war, famine, recession, and relive the Age of Aquarius. This past week's 4oth anniversary paeans were even more over-the-top than past mass recollections. As the collective Baby Boomer memory grows dimmer (all that adolescent drug use certainly adds to the fog), the apotheosis of Woodstock into some major turning point in history becomes even more rapturous. We are led to believe that for those three days humankind achieved some sort of spiritual zenith when love and peace reigned supreme. The USA was never the same since, Brian Williams tells us, with a straight face. Joni Mitchell's song, Woodstock, sums it up best: By the time we got to Woodstock/We were half a million strong/And everywhere there was a song and a celebration/And I dreamed I saw the bombers/Riding shotgun in the sky/And they were turning into butterflies/Above our nation. Yeah, right. How ironic that Joni didn't even attend the event, having decided that an appearance on The Dick Cavett Show would give her more exposure.

The sanctimonious, hyperbolic depiction of the "Woodstock Music Festival and Arts Fair" as a major historic event is an embarrassment to my generation. Who do we think we are or were? Woodstock was a party, nothing more, nothing less. True, it was a gargantuan party, maybe the biggest ever. When it came to open sex, acid dropping, pot smoking and great music, it was second to none. But did it really change the course of history? Gimme a break. A bunch of mostly pampered, privileged middle class white kids wallowing in the mud and getting monkeyed up didn't do anything but trash some nice farmland. Who doesn't feel peace and love when you're high as a kite and got your hand up some hippie chick's peasant dress? These kids were liberated alright, liberated from their parent's telling them to pick up their bedroom and be home by midnight.

We Baby Boomers are living up to the stereotype as narcissistic and full of self-importance. We are the greatest generation when it comes to megalomania. Woodstock was an orgiastic, modern day bacchanalia that had significance only in its size and hedonism. When youths tore down the Berlin Wall, that was a big deal. What college kids did in Iran this spring was a big deal. The civil rights Freedom Riders is a case of Baby Boomers showing enough courage to stand against the tide of history. What courage was displayed at Woodstock? Lying passed out in the pouring rain while Joe Cocker sang A Little Help From My Friends?

Woodstock only became a big deal when some savvy marketing guys decided to make it a big deal. Millions were made from licensing rights, movie and album deals. If it weren't for some shrewd hucksters, Woodstock would have gone done as just another music festival like Montreau or Altamont, only bigger and muddier.

If we Baby Boomers want to see a more accurate legacy of the the 1960's credo "If it feels good, do it," then we should look to our progeny's attempt to restage Woodstock at its 30th anniversary in 1999. Woodstock II had to close early due to mobs setting one of the stages on fire, numerous rapes and plenty of violence and mayhem. We reaped what we sowed. Despite all the nostalgic tripping, no wonder no one came up with the idea of Woodstock III.

Saturday, June 27, 2009


The poor freak's body is still warm and already the utterly tasteless, hilarious jokes have started. "Michael Jackson hasn't been this stiff since Macaulay Culkin slept over."

Ground zero for this beyond-the-pale, over-the-line humor are trading floors in New York. Within a matter of minutes after a celebrity's death comes across the tape, the jokes pop up like Jack-in-the-boxes.

"Hey, news flash: they just found out that Michael Jackson died from food poisoning," a trader shouts over to the sales pit.

"No shit," one of the more gullible sales guys replies.

"Yeah, they say he was eating too many twelve year old nuts."

Guffaws mixed with groans rise across the trading floor. I do have to say that one was a bit below the belt, no pun intended, or a low blow, again no pun intended.

I've often wondered who thinks up these jokes. Are they just spontaneous eruptions or are the jokes prepared ahead of time the way some news organizations have obituaries in the can, ready to be released the minute somebody famous dies?

The latter explanation is supported by the fact that most trading floors do have their "death watch lists," which rank the top two or three celebrities most likely to next kick the bucket. The death watch list often inspires feverish betting, especially when you have a double whammy like two celebs crapping out on the same day, as we had with Farah and Jacko. And Ed McMahon going down just a few days before really scrambles the leader board. As of Friday at the close of business, the odds-on-favorite on my trading floor was Patrick Swayze. I laid some bucks down on Nancy Reagan.

Did you hear about how Farah Fawcett went to heaven and met God? God told her that now that she was in heaven, she could have anything that she wished for.

Farah thought a minute and then said, "I wish for all the young children in the world to be safe from sexual exploitation."

And so God killed Michael Jackson.

Okay, I give that one style points for tackiness but have to penalize it for borderline blasphemy.

McDonald's is coming out with a new burger in honor of Michael all meat patty in a ten year old bun.

I know that some will find these kind of jokes abhorrent; but I can attest that the people making them up and passing them around are not insensitive creeps or morally obtuse jerks. These guys are for the most part decent, upstanding citizens. I attribute these celebrity death jokes to a defense mechanism of sorts. These jesters have the same initial reaction that most do when they hear that someone like Michael Jackson suddenly dies, which is shock, followed by dismay and a tinge of sadness. We have intimations of mortality as we realize that if the rich and famous can so suddenly and unexpectedly keel over, then most assuredly the same thing could happen to us. But we really can't function as working, productive human beings if we constantly ruminate upon our own possibly imminent demise. So what do we do? We makes jokes about death. And trading floors, given that they are the locus of several dozen mostly males who are mostly vigorous and jocular "frat" types, are the perfect breeding ground for this type of gallows, or rather post-mortem, humor.

Michael Jackson reaches the pearly gates and the first person he meets is Elvis Presley. Wow, how perfect, Michael thinks, the King of Pop meets the King of Rock 'n Roll!

But all Elvis can think is, What carnival did this this freakazoid escape from? Is it black or white, a dude or a dudette? Man, how did he last ten minutes on earth without some good-ole-boys tying him to a rope attached to a trailer hitch and taking him for a cross-country fun ride? Whatever this thing is, it must be lucky.

Michael extends his hand to Elvis and says in his nine year old girl voice, "Oh Elvis, I've been dying to meet you. "

"Well, you're dead alright," Elvis snickers with his signature upturned lip as he ponders for a few seconds whether to shake this creature's hand on which it is wearing a glove sparkling with rhinestones. What happened to its other glove, he wonders.

As Elvis finally deigns to shake his hand, Michael says to him, "My name is Michael Jackson and guess what?"

"What?" Elvis replies warily.

"I married your daughter."

So don't be afraid to laugh death in the face, at least as long as the Grim Reaper is not pointing his scythe directly at you.

Sunday, May 17, 2009


Some of my more devoted readers may remember my posting on October 23, 2006, i.e. "Gulfstream Liberals," in which I attempted to explain why the politics of so many wealthy people turn liberal once their mound of money has reached mountainous proportions. This tendency is especially prevalent among the New Capitalists running hedge funds or private equity money. For example, in the 2008 presidential election, 70% of hedge fund money supposedly went to Obama. Why, one wonders, would rich people support politicians whose policies go against everything that enabled these people to get rich. Why would the rich support those who sneer whenever they utter the words, "the rich," as if the sneerer actually believes the aphorism that at the beginning of every great fortune lies a crime. Most liberal politicians view wealthy people not as successful entrepreneurs or managers who through skill and brains have created great innovations and countless jobs, but as greedy, rapacious money grubbers who wake up every morning with new devious ways to screw the "little guy." At least that's the view that comes across in their speeches. This stated view doesn't prevent them from accepting donations from the rich, leading one to conclude that these politicians are either venal or disingenuous.

Whether or not liberal politicians truly believe that rich peoples' money is inherently tainted, they most certainly believe that some people have too much money for their own good. This certainty justifies their confiscating at least half of every dollar earned by those whose success and talents place them in the upper ranges of taxable income. No one, in their eyes, deserves to be too rich.

That rich people actually give donations to these politicians against their own self-interest is the converse of the liberal presumption that middle class people vote Republican against their own economic interests because they are basically obtuse and naive or too wrapped up in guns and Jesus to know what's good for them. (Read What's the Matter with Kansas.) In "Gulfstream Liberals" I suggest that the desire to be in with the In Crowd, namely the Media/Hollywood liberal elite, motivates these mostly life-long Republicans to suddenly and drastically change their political stripes.

But alas, many of Obama's wealthy backers have recently become disillusioned with their man, particularly the hedge fund crowd. The WSJ recently ran an article in which several hedgies (most of whom wanted to remain anonymous) expressed frustrations with Obama. I guess that they were shocked to find that Obama really is a liberal and buys into that same liberal dogma that has been around since FDR. Did they really think that all those campaign promises about higher taxes on the wealthy and greater regulation of Wall Street were just empty campaign rhetoric? Did they really think that just because Obama was all too happy to take their money meant that he would be all too happy to take their advice?

A few in the article pointed with particular rancor at the way hedge funds have been treated in the Chrysler/GM bailouts. The Obama administration, being the lifesaver of last resort to drowning Chrysler, used its leverage to force a deal on Chrysler's stakeholders, i.e., the shareholders, who basically got nothing, the dealer network, the UAW and the lenders. According to precedence established by generations of banktrupcy cases, the senior secured lenders are first in line when it comes to divvying up the carcass of the bankrupt company. In this case, however, the Obama guys tried to put muscle on Chrysler's lenders to take approximately twenty-nine cents on the dollar for their $6.9 billion in secured loans, while the UAW's fund for paying benefits to retirees got half of its claim reinstated and 55% of the equity of the new company, even though the retirment fund would normally be in the back of the line. Most of the rest of the equity went to Fiat, who intends to put no cash into the company. And what equity is being granted to the lenders in consideration of their cutting their loans by two-thirds? Zippo. The lenders are getting screwed while the UAW workers, in comparison, make out like bandits. And the irony is that if anybody should shoulder most of the blame for the Chrysler debacle, then the UAW would be first in line.

In the case of GM, the unsecured lenders who put $27 billion into the company are being offered 10% equity in the new GM. Meanwhile, the fund set up to pay medical benefits to retirees and which is owed around $20 billion is getting half its claim kept in place and 39% ownership of the company. Naturally, the lenders are raising hell and will more than likely push GM into bankruptcy. No matter how it plays out, GM is going to be mostly owned by the US federal government and the UAW. I'm sure Toyota is trembling at the prospect of having to compete with the new GM (as in Government Made).

The end result of these blatant attempts by Obama to tilt the bailouts to the benefit of the UAW is that fewer fund managers will be eager to financially support any struggling company that is heavily unionized.

And so Mr. Hedgie is wondering what he got for his donation and all the donations that he pressured from his employees. Maybe he was hoping that Obama would be like Clinton, who regularly said things that he really didn't mean. Slick Willie, to his credit, was deep down pro-business, as are most governors who every day have to figure out ways to increase employment in their respective states. But Obama lives up to his rhetoric. He is fundamentally, dyed-in-the-wool pro-union, which means that he is fundamentally anti-business. He has never really had any exposure to the private sector. He not only doesn't truly understand it, he doesn't like it. We need Big Government to keep all those crooks and predators in line, according to his world view. Obama epitomizes the old saw about Democrats: they love employment but hate employers. I guess in the liberal Demo utopia everybody would work for the government.

But then again, maybe Mr. Hedgie looks at those donations as just the price he has to pay to hobnob with Brad Pitt, Sharon Stone, Robert Kennedy, Jr, Frank Rich and the rest of that Looney Tunes bunch.

Saturday, April 11, 2009


A liberal's favorite way of accusing someone of being a neanderthal right wing fascist is to simply say, "You just don't get it." I have to confess: when it comes to global warming, I just don't get it. These global warming doomsayers and scare mongers are constantly telling us that the world is about to end. If we don't do something within the next few years that significantly lowers carbon emissions--and lowers economic output and our standard of living (they don't tell us that)--then we are past the point of no return. It will then be only a matter of time before the Stature of Liberty is up to her nostrils in water and Florida no longer exists except as a modern version of Atlantis. A compliant media happily passes on these hysterics as the gospel truth.

Okay, say I buy the global warming argument, swallow it hook, line, sinker. Suppose I'm ready to blindly put my faith in these UN computer simulations that claim to accurately predict what the weather will be like a hundred years from now (and my local weatherman has a hard time predicting what next week's weather will be!). Let's pretend I'm ready to agree with Al Gore that the debate is closed, that anybody who disagrees with anything that he has to say is a "denier," a dope, or else in the pocket of Big Oil. (Why is it that anyone who disagrees with a liberal is either stupid or corrupt? Can't they ever argue the issues?)

Assuming all this, my immediate, logical, natural reaction would be that we need to build nuclear power plants, as many as we can and as fast as we can. The President and Congress should waive all environmental and other regulatory red tape that constrains the building of nuclear power plants. Moreover, the federal government should offer financial guarantees and other direct monetary incentives toward the development of nuclear power, just as it does with ethanol, solar, wind energy. After all, nuclear energy has zero carbon emissons and has shown that it is capable of supplying massive amounts of energy, just as it does in France or Japan. Even the most ardent supporter of solar and wind power will admit that it will take many decades before either of those supply a significant percentage of our energy needs. And we don't have that much time, according to the global warmies. Action must be taken now because the fate of civilization and Mother Nature Herself hang in the balance.

So why am I greatly surprised to still hear that most environmentalists oppose nuclear power? Obama's latest budget has tons of goodies for non-carb0n energy but not a penny of incentives for nuclear. Like I said before, I just don't get it. Do environmentalist believe that nuclear power is dangerous, even though no one has ever died from the use of nuclear power in the US, or in France and Japan for that matter? Environs are quick to point to Chernobyl as a example of what can go wrong with nuclear energy. But the plant at Chernobyl is a Model-T compared to modern day nuclear facilities. Plants today have multiple layers of safety features and the release of radiation from such a plant is a nil possibility. Natural gas is considered a relatively clean form of energy but tens of thousands of people die every year from natural gas explosions; yet, no one is saying prohibit the use of natural gas.

Another concern that some raise is spent nuclear fuel. Most reactors store spent fuel at facilities on site. The Nuclear Waste Policy Act of 1987 designated a facility in Nevada's Yucca Mountains as the central repository for nuclear waste. But that numb skull, Senator Reid, has singly-handed blocked this repository from being developed, despite the support of 39 states that have nuclear waste and with the acquiescence of Obama.

Who knows why environmentalists are so adamantly opposed to nuclear power. To truly understand why, one would have to untangle the innumerable knots and strands that constitute the liberal mind. Suffice it to say that their opposition to nuclear power gives the lie to the doomsday prophesying. It's hard to believe that these environs really believe their own rants and raves about global warming when they block the one means that can truly do something about it.

Sunday, March 29, 2009


Just think, the Great Financial Meltdown of 08 was caused by something as simple and innocent as people wanting to own that sine qua non of the American Dream, i.e. a house. A young couple with a baby buys their first house, which purchase enables a couple with three kids to move up to a larger house, which enables a banker and his family to spend his bonus on his petite manse. And so up the line the chain transaction went, a purchase leading to another purchase leading to another purchase. At every step was a smiling mortgage broker or banker willing to lend on increasingly exotic and generous terms in order to maintain market share and rake in ever larger amount of shekels. The Fed was leavening their dough with massive amounts of liquidity and the lowest fed fund rates ever. The originator of the loan would then turn around and flip it to Freddie or Fannie, both of whom were under increasing pressure from regulators and the Barney Franks of Congress to make sure every American was able to do so, no matter how flimsy his or her credit qualifications might be. In the case of loans that were too large to qualify for Freddie's and Fannie's limits, the Wall Street firms and other players like Countrywide happily stepped in and took the loans. Fannie/Freddie, Lehman, Bear Stearns, Countrywide, et al next packaged all these mortgage loans into securities and sold them to suckers all around the world, from the local college endowment fund to Singapore pension accounts. There was no shortage of buyers since these securities offered great yields for the triple A ratings that the rating agencies stamped on them, rating agencies that we now know really didn't understand what they were rating. And oh what a wonderful world it was, everybody getting their little pinch of dough as the urge to own a house got transmuted into a AAA security owned by some credit bank in Germany.

And then the daisy chain turned into a cluster fuck. All it took was a slight breeze and the house of cards toppled over. All it took was a slight uptick in interest rates, a leveling of housing demand, rumors of a couple of Bear Stearns hedge funds having problems to send investors stampeding toward the exits. It was like someone shouting, "Allah Akbar" in a crowded Baghdad market, everyone expecting the next sound to be KA BOOM!

Somebody during the Roaring Twenties said that prosperity swallows all sins. I suppose that the converse is true as well, namely that poverty pukes up all sins. The peasants have gotten the pitchforks out of the barn, lit up the firebrands and are searching every dark corner of the village for the sinners who caused this catastrophe. The blame game is a natural part of every boom-bust cycle; and since this boom-bust cycle has been especially vicious, the blame game has been vicious as well. Indictments fly like bats out a cave.

I pity those AIG guys. They are the scapegoats du jure. Mobs march outside their offices, a US senator suggests they do the honorable thing and commit mass suicide, that thug NY State AG, Andrew Como, threatens to release their names if they don't give up their bonuses. Como, what an asshole. He knows that the ACORN manufactured mob is in full froth and lather and ready to "exact justice." Given the temper of the times, would he really release names? Why would a responsible person even threaten to do so? The threat is real enough that some of these guys have moved their families out of town to the in-laws until cooler heads prevail (and who knows when that might be). The company in broad daylight offered these guys retention bonuses because AIG needs their expertise to wind down those disastrous positions in a way that will keep them from becoming even more disastrous. The evidence shows that Como, Congress, Gaithner all knew about these bonuses before the NT Times made them public. So where was the outrage then?

I am particularly tired of hearing about the outrage in Congress. The amount of AIG retention bonuses is $165mm, about what Congress just authorized to spend on waterparks in the recently passed stimulus bill. If anybody is to blame for the housing collapse, then those elected officials who put the Community Reinvestment Act on steroids and brow beat Fannie and Freddie into making stupid loans should be first in line. But for once that cliche "We are all to blame" holds true in this case. Everybody got something from the run up in housing prices over the past decade, everybody including the real estate agent, the appraiser, the closing attorney, the mortgage broker, the lender, the Wall Street banker who securitized the loan. And the biggest beneficiary was anyone who bought a house during those giddy times; in other words, just about everybody. We all knew, in the back of our mortgaged minds, that these housing prices were too good to be true. And so we milked it as much as we could, mainly by taking out equity lines to sap the crazy appraised values that justified the dumb loans.

How can you call someone a victim who was able to purchase a home that he had never in his wildest imagination thought that he could afford. And in reality he couldn't afford it. Many of these "victims" would have been better off remaining renters. Loose credit can perform magic of a sort. But instead of pulling a rabbit out of a hat, the lender-magician ends up pulling out a turd instead.

Congress is now talking about modifying mortgages for those struggling to make the monthly payment. Before we rescue somebody from foreclosure, maybe we should ask them to give up the flat screen HDTV that he purchased through his equity line. How many vacations, appliances, autos, wardrobes were paid for through equity lines? Like manna from heaven.

So what do we do now? I'm struck by the paradoxes contained in the solutions being offered to cure us of this malady. For years, even decades, we have been told by scolds that we borrow too much, spend too much. We all shrugged that off, but now the chickens have come home to roost. And what are the same scolds now telling us to do? Borrow and spend more. Don't save, consume. And if we were worried about those Bush deficits that got as high as $450 bil., we are now be told to be thrilled with Obama's trillion dollar deficits as far as the eye can see. All these proposals, all these Fed actions, all these new acronyms such as TARP, TALF are just whistling past the graveyard, dancing around the root problem, which is the roughly two trillion dollars of bad assets clogging our credit system. We are trying to paper over that two trillion with ten trillion of debased currency.

If the system is clogged, then get a roto-rooter. This is not going to be painless. Sure, all this spending might cause a temporary spike in the economy that might last a year or two. But right behind that will be an inflation dragon that will make the inflation during the Carter years look like a gecko lizard. The Fed will then have painted itself into a corner as it will either have to jack up rates like Volker did and possibly cause the depression that we have all been dreading or else resign itself to a banana republic inflation and depreciation of the currency. The economic, social, geo-political consequences of that latter course do not provide for serene contemplation.

The only true and sure way of getting of out this economic malaise is to recognize what those two trillion dollars of bad assets are really worth. The consequences of this will be severe but cathartic. Banks will fail. Big banks. But a year or two from now, we will be on the road to economic salvation and not facing hyper inflation. We must, brothers and sisters, atone for our sins. Only that way leads to redemption.

Sunday, March 15, 2009


Now that Obama is close to getting a belated Christmas present in the form of a healthcare bill, you would hope that he would lighten up on his wish list and focus on doing something about the trillion dollar plus budget deficits that stretch as far as the eye can see. (Remember all the angst during the Reagan years about "100 billion dollar deficits as far as the eye can see"?) But no, his appetite for spending appears to be insatiable. Take the unused TARP funds (and he is more than happy to take them). Why not use that $200 billion to pay down the deficit? Instead, Obama wants to spend it on another stimulus bill in the guise of a "jobs program." And so the beat goes on.

I wonder what the Chinese are thinking, given that they are the ones who are lending most of the money for all these dreams and schemes.

They are probably thinking the same thing that your local banker would be thinking if you, Mr. Valued Customer, paid him a visit with a similar wish list but scaled down to your individual circumstances.

"Hi Dan," you say to your friendly "personal financial advisor" as you plop down into the cushy chair facing his fake Louis XV desk. You pluck one of the Jolly Roger candies from the little brass bowl on his desk.

"What's up, Mr. Valued Customer. What can I do for you today?"

"I'm looking for a loan, Danny." Apprehension fills his eyes.

"A loan, huh? What type of loan?" He quickly presses his tortoise-shell eye glasses against the bridge of his nose.

"Oh you know, just a personal, unsecured loan," you say as you suck on the hard candy.

"Ah huh...and what amount are you looking for?"

"I was thinking a million to start."

Dan gags and almost spews out his mouth the coffee that he just took a big sip of.

"A million dollars! For what?"

"Oh, you know, I was thinking about making an addition to my house, another 1500 square feet or so. I really need a place to hang out away from the wife and kids. Sort of my own personal Valhalla, if you know what I mean. A place where me and my buddies can do what we like to do, shoot pool, catch games, drink beer...guy stuff." You don't need to mention porn watching as one of those activities because you know that Dan gets your drift.

"And you think that addition will cost as much as a million dollars?" Dan asks with a tremulous voice.

"No, but I also had in mind putting in that swimming pool that Betsy's been bugging me about for ten years. Labor's cheap right now with the Great Recession and all. So I figured that now is as good a time as any to git her done."

"But Valued Customer, we already have a two million dollar mortgage on your house. And if we did an appraisal today on it, I'd be worried that the value doesn't even cover our mortgage."

"C'mon, Dan, I'm talking infrastructure! I'm improving my house and putting a lot of local workers to boot besides."

"I don't know, Valued Customer. Even if I thought we could make the loan, I still don't see how it would amount to a million dollars. I mean, you're talking about us increasing our exposure to you by 50% in one year."

"I didn't realize that you looked at me as something that you're exposed to, Dan," you say with a hint of indignation in order to put him on the defensive. "What am I, some kind of disease?"

"No but, you know..." Dan stammers. "So what else you got in mind with the money?" he asks to get back to the main subject.

"For some good purposes, Dan. Like healthcare. With medical costs running like they are, I figured that it might be smart to prepay the next 10 years of my family's out-of-pocket medical costs. Something wrong with that?"

"Nothing's wrong with that, I guess. It's just that you can't expect me to pay for it."

"And also you got a problem with education? Cause I wanna fund my 529 college funds up to the gills with the money that you are going to lend me"

Dan looks at you with a befuddled, sad expression, like he's wondering what caused you to totally go insane.

Could the Chinese be wondering the same thing about the collective mental health of our nation? We are basically proposing to double our national debt this year. Foreigners now own over half of that debt outstanding and the Chinese own the largest percentage of foreign held debt. They hold close to $700 bil in US treasuries and almost two trillion dollars of US assets altogether. Is it any wonder that this week Chinese officials began to publicly raise questions about the future worth of their US Treasury holdings? During Obama's recent visit to China, leaders there treated him like he was some n'er-do-well in-law showing up the front door with his hand out. I don't think anyone seriously worries that the US might default on its obligations. After all, the US is in the enviable position of being the only country in the world that can borrow as much as it wants in its currency since the dollar is still the main reserve currency in the world. We can always print as many dollars as it takes to pay our obligations. But that's exactly what worries the Chinese and other lenders to the US. Assuming that the Feds at some point will have to open up the printing presses in order to loan money to the US TSY so that it can pay its obligations, a great debasing of the currency will occur. The dollars that we will be sending to our lenders will eventually be worth much less in those lenders' respective currencies.

Such curreny debasing causes inflation. The end of Obama's first term could witness an inflation rate that we haven't seen since the Carter years, thanks to this enormous expansion of the money supply. But maybe inflation is secretly or subliminally what Obama and his econ guys have in mind. After all, inflation is a boon to borrowers and anathema to creditors. Drastically devaluing the currency is a back door, "unofficial" means of defaulting as the borrower is in effect paying the lender back much less than what the lender has bargained for, in the lender's currency.

Notwithstanding this de facto default, the Chinese aren't going to dump their treasuries. The fact is the Chinese need us as much as we need them. The US GDP is almost one fourth of the world's total and US consumers consume almost a third of all the world's goods (ergo, our large trade deficit). The Chinese need the US to keep consuming those goods and will continue to lend to us so that we can continue to do so. The more we consume of their goods, the more dollars they will have and the optimal place to put those dollars is in dollar assets, particularly US treasuries. China can not unload its treasuries without causing harm to its gigantic US treasury holdings. Dumping would also cause US interest rates to soar and hurt their Most Valued Customer.

But that doesn't mean the Chinese will sit idly by while we go on a borrowing binge. They can, if they wish, exert the same leverage and control that any lender has over a heavily indebted borrower. And how might they exert this leverage and control? Don't be surprised if in the near future, some very hush-hush, closed door meetings take place between high government officials of the US and China. Maybe during such a meeting, the Chinese make it clear that they aren't happy with our spendthrift ways. Maybe they strongly suggest that we rethink that big Universal Health Plan that has been put on the table. Or even more likely and insidious, maybe they let it be known that they think our Dept of Defense budget is way too high and needs to be trimmed. Maybe they suggest that we cut back on the F-22 Raptor program or that new state-of-the-art destroyer that's on the drawing boards. After all, as much as the US and China might sometimes seem like two staggering drunks trying to hold each other up, China will increasingly become a military as well as an economic rival to the US. Yes, the Chinese want the US to remain strong economically since we are the primary end market for their manufactured goods; but that doesn't mean that they will not use their economic leverage to keep us from being too strong, particularly from a global strategic power point of view. The US-China relationship has more paradoxes and nuances than a Ingmar Bergman movie.

And what if we have the audacity to say in so many nice diplomatic terms, "Fuck you" to these "suggestions" from our Chinese lender? Then we can expect the Chinese to say, "Okay, then don't expect to see us at your next treasury auction." And since the Chinese have been buying roughly half the bonds at such auctions, that would be a mighty big "Fuck you" back.

Every lender has his borrower by the balls. The last thing a lender wants to do is kill his borrower. But that doesn't mean the lender can't squeeze those balls really hard.

Sunday, March 08, 2009

Temple of Doom

Hello, dear and faithful reader. Wow, can you believe that a little over two years have passed since I last wrote to you. Good Lord, where has the time gone and look at what it has wrought. One or two things of note have happened over the past couple of years...yuk yuk. I must tell you, dear Reader, that my world has tumbled and crumbled around me. I now know how Sampson felt when he brought the temple down, for I too once thought that I was mighty and strong. I was riding high back at the end of 2007, so high that I neglected to write to you. You see, I had just accepted a job offer from Bear Stearns. What better place for an aggressive, hustling stock dick like me than BS? (And yes, some envious jerks try to be cute and say that BS stands for Bull Shit). But gamblers and swashbucklers ruled at BS and you know how I like to dress up in pirate costumes. The move was definitely an up one from the firm where I once used to roost, BSBR Capital. (And yes, some envious jerks try to be cute and say that BSBR stands for Bucket Shop Boiler Room). But three months later and that Greek, butt fucker Jamie Dimon scarfs Bear Stearns down like he would a Gyro, with $60 billion worth of tzaziki sauce from the Fed.

And so there I was, out of a job, back on the street. But I picked myself up and dusted off my Armani pinstripe suite because that's the way I roll. After pounding the phones and reshaping some of the lies on my resume, I stuck gold and landed a job at Lehman in the high net worth group, otherwise know as the Lollipop Guild because the clientele consists mainly of suckers. Truth be told, more than luck got me the job, as I had to call the chits on a Lehman muckety-muck whom I used to supply with his weekly fix of coke back in the days of Palladium and Tunnel (now I'm aging myself). I don't need to tell you what happened next: The Fed started freaking out about something called "moral hazard," something which I thought you found only on a golf course, and decided to toss Lehman overboard like a ton of stinking pig shit. And so there I was once again, flat on my ass, back to to square one. To add insult to injury, Kimmy, my live-in bitch, decided that she'd had enough of this in-and-of-work bullshit and left me to go back to pole dancing. Just as I was about to give up this whole schlock stock broker thing and send my resume to the Post Office, a pal of mine gave me a tip: Madoff Securities was looking for a few good shysters. I was so stoked when I did finally get a job offer from Madoff because Bernie Madoff was the Man. Bernie the Mensch as he was known in every Jewish country club across the world.

The rest is history, as they say. And so is my career. Yes, the temple that was once Wall Street has come tumbling down. And just like Samson, we pulled it down ourselves, with motives much less credit worthy than his. But nowadays, is anything credit worthy?