The End of All Things

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Don’t worry.  Be happy!

As I sit here typing, I can hear the financial experts on CNBC discussing the stock market.  I should mention it is 2:00pm CDT and the Dow Industrials are in line to fall 400 points today.  Even gold is down $50 per ounce.  I can hear the stress in those knowledgeable voices.  In their own way, they are all saying the same thing: “EEeekk!”

Okay, I will admit a few things are wrong with the economy.

First, the US has a $60 trillion unfunded liability for various pension and health programs.  Second, the US Congress recently demonstrated that as petty and mean-spirited as they are, they cannot cut a single dollar from their spending addiction.

Next, 20 million or so folks are out of work or under worked.  The lucky employed are largely paid on a par with workers in India or Russia.  That is not good.

Then, there is Europe.  Specifically, the European Union, sometimes called the “EU” (Rhymes with “Pee Euw”) is falling apart and they have no central bank or printing press to save them.  Soon, most of Europe could return to the dark ages.

The US has trouble and may not fare much better than Italy or Ireland when push comes to shove.

I am not worried.  Why?  I am not concerned because the US Congress is on vacation for five glorious weeks.  I plan to relax; sun bathe (10 minutes at a time, y’know?) and mebbe sip a cold beer in the evening for as long as they are out of town.  Everything might blow over and get better in their absence. :)

When they return, I will begin to worry.

Until then, I suggest everyone eat, drink and make merry.  (No, not make Mary... sheesh!) The unpleasantness will be upon us soon enough!

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The Great Debate

 

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I had business in another city on Monday, the first day of August.   The ride from my home to my appointment is about 120 miles, each way.  I wanted to beat as much of the heat as possible, so I set my alarm at around the time the U.S. Marines landed on Guadalcanal.  Well, maybe I slept in a bit later, but 0400 arrived at the same instant I turned out my lights for the evening.

I sipped and guzzled all the tea I could hold, hoping at least one eye or the other would be open for the entire journey.  

As I waited for consciousness to arrive, I snapped on the television and scanned several stations for a report on the definitive issue of our times.  That is right; I was looking for the weather reports.  The first estimate I got was for a high temperature of 105.  No chance for rain and the country might be broke before it got that hot anyway.  Educated meteorologists debated back and forth.

If this were not gloomy enough, the next person guessed the temperature would hit 106.  The Weather Channel posted a 102, I think, and I was on their side, but the screen was too blurry for me to say for sure. 

By the time I left the house at 0730, the high bid was 108 and I felt the weight of summer gloom heavy on my shoulders.  “Why would anyone live here,” I asked myself rhetorically.  “Why indeed,” I answered.  I sped south where the air was 90 at 0900.  “Very symmetrical,” I thought.

In Washington, D.C., The Congress was in full showboat mode, dazzling the people with a full frontal assault of smoke, mirrors and dire predictions.  Many in Texas had bigger fish to fry.  Those fish would be the ones they picked up from the mud where their stock tanks used to be.  Without water, cattle and fish are equally perishable commodities.  You can sell cattle, but you might as well eat the fish.

I arrived home in the middle of the afternoon and collapsed.  Even in a 68-degree cabin, the intense heat dehydrated me.  Two liters of Gatorade later, I was able to collapse on the sofa until the cool of the evening.

Whoever had 107 in the pot won the prize yesterday.  I fear that will not cover it today.  I am guessing 109.  Anybody want the over or under?

I plan to spend today reading brochures from Finland, Yellow Knife, Yukon Territory and other frozen places as a spiritual present to myself.  Later, I may go out for ice cream.

Stay in the shade, my friends.  November and autumn will be here before you know it.

U.S. Economy Circles Drain?

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Recently, it occurred to me that we may be in more trouble than we know. Over the weekend, I had an opportunity to reflect on the Congressional approach to cutting a relatively small amount of money from the current budget. Overall, it was an unflattering spectacle. There were plenty of threats, name-calling and outrage on every side of the issue. Every party stretched truth beyond recognition and lies hovered near the lips of the speakers.

It was only at the last minute that the parties reached agreement. I am sure the nation sighed with relief, as did I.

The next hurdle for our federal government is the debt ceiling. Since we are in the hole for more than $14 trillion, what harm could come from borrowing another trillion or two? I expect very little.

Then, the notion crossed my mind that the harm lies in the process. As nervous creditors watch, our Congress may put on another “show” over this issue, too. Then, at a quarter ‘til midnight, they’ll announce an agreement. It will be too late.

I imagined the emotions and judgments a serious creditor might make while watching the federal circus, day after day. The thought made me queasy. What would it do for the sensitive digestive tracts of, say, the Chinese? I hope they have a large wok handy as they watch. I can imagine them needing a wash-up before meeting to decide what to do – days or weeks before the deadline.

Then I imagined a large container ship might sail into the Port of L.A. a week later. The cargo of redeemed U.S. Treasuries would have the ship decks awash under the load. In a few more days, trillions of dollars in U.S. currency would arrive at a port in China, say, Shanghai.

Then? Well, let’s just say our debt problem would be less, but we might soon feel nostalgia for $5.00 per gallon gasoline.

Gee. I truly hope I am wrong about this.  Or, maybe not.

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Dear Mister President…

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My day began early. I tuned in to CNBC to get a quick read on the financial markets before moving on to the mundane chores that make up my life in retirement. As I sipped tea, the TV told me one of my core holdings, Goldman Sachs, had soundly beaten Wall Street’s earnings estimates by $3.00 per share. “Woo Hoo!” I thought. It was a happy way to begin the day. I felt confident my shares would increase on the good news. Now that I rely upon Social Security for income, I need decent returns from my various investments for survival. My prospects seemed bright as I finished breakfast and stepped into the shower.

Imagine my surprise when CNBC broadcast your speech into my bedroom as I dressed. Always respectful of my President, I stopped mid donning socks to listen. As you spoke, a sense of dread began to creep into my mind. Worse, CNBC displayed the various stock index prices, including quotations for Goldman (GS) as you spoke. By now, you may have heard what happened. If not, I will share it with you now. Goldman Sachs, the premier American investment banking, er, bank holding company dropped like a stone. The rest of the market followed them down. I think my feelings were similar to those experienced by someone watching a high-speed train wreck at a distance. It was horrible to see, but I could do nothing to change it.

Overcome with emotion, I shouted “For Chrissake, stop talking!” However, you did not hear me. You just kept talking about how you wanted to crucify some of the most profitable businesses in the country. Because of your comments, I am somewhat poorer this afternoon. I fear there are millions like me, who will eat a little lower on the dog because of your remarks.

I want to go on record as saying, “Thank you very [bleeping] much” and “What the Hell were you thinking?”

I respectfully ask you to revisit the issue of banking and financial regulation. If you wanted to get to the heart of the matter, you might investigate the role of the Federal government in creating the current nightmare. There is a substantial body of banking law on the books. If enforced, these laws might have averted the depression we currently enjoy. The U.S. Congress is certainly among the prime culprits. How about imposing some restrictions on that august body?

Well, thank you for listening. I feel somewhat better now that we had this little chat. I simply do not trust I will feel better for very long.

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