DIPUTS

My peeps are calling and asking where the market bottom is going to be. Do you think I have DIPUTS tatooed on my forehead? That is STUPID spelled backwards so you can see what you are when you look in the mirror by having the temerity to try and time market bottoms. Some things are going on now with peoples' asset allocation choices that make me want to weep even harder than when I think of my own human condition. More later.

When all else fails, read the instructions.

Competitive capitalism is going to take some lumps and bumps in the near and far future as a result of what I call the "double bubble" that has hit us from 2000-now. OK, it is well and good that this type of self-evaluation takes place. But when it is all said and done, please remember that the only way that you and your family and that of your ancestors have escaped the grinding poverty that characterizes most of the world's population is through the evolution of free markets here in the U.S. and throughout our economic history. If you take the income level of what we define today as poverty ($10,400 for an individual in 2008), 13% or so of our population are classified as poor. If you take that same income level and put it into equivalent purchasing power dollars in the year 1900, the turn of the last century, guess what percentage of the U.S. population in the year 1900 was below what we consider poverty today? The answer: 90%. And that is a solid economic fact from Nobel Laureate Robert Fogel.
Remember this as competitive capitalism gets hammered and takes a whipping. Don't forget the bigger picture. Oh yes, and remember too that the World Bank definition of poverty is $2.00 a day.


And one more thing, when the conversation turns to greed, listen to the Master here: http://www.youtube.com/watch?v=RWsx1X8PV_A

Milton Friedman is in the Randy Parker Hall of Fame too, but I'll speak more of him later...and for the rest of my life.

Randy Parker Hall of Fame...

In a previous posting I talked about Gordon Smiley who is in the Randy Parker Hall of Fame (see posting on Friday September 26th). Also on the top shelf of the Randy Parker Hall of Fame is the gentleman at the left, Herbert Meyer. Herb is one of the most fascinating intellectuals I have ever met, and he was on the forefront of bringing down the former Soviet Union when he worked for the CIA. I invite all of you to view his web site at http://www.stormkingpress.com/ and buy a copy of his incredible work The Siege of Western Civilization. You might also watch his You Tube videos here http://www.youtube.com/watch?v=0A6twK8ahbY , here http://www.youtube.com/watch?v=60wUfXqP0b0&feature=related , and here http://www.youtube.com/watch?v=QsW8JDDr3O8&feature=related and listen to what he has to say. You'll come out a different person. We both gave headline speeches on different days a few years back at a trade association meeting. I flatter myself to call him my friend. Give a listen and learn. Disagree with everything he says, that is your choice. Ignore him and we all may pay a terrible price.

Nobody saw it coming....

I just watched the first part of 60 Minutes. Some very smart person just said we are in this mix because nobody could forsee the fall out from the subprime mortgage promulgation. Really? Well I guess that makes me a nobody (see, my mother-in-law was right after all) because I blew the whistle back in 2005 on the housing bubble in a trade association speech I gave and in all subsequent public forums I was in. Some dudes who listened to me sold their salt water real estate and profited handsomely. Others ignored me and are upside down on beautiful mansions looking at the coast that they can't afford and got foreclosed on. But it is incorrect to say nobody said anything, because I did and I was right. But few listened. Perhaps if I was a Federal Reserve Governor instead...as my father said, "a dreamer lives to dream."

Learn all you can from this bubble and its fall out...because it will happen again. It's only a matter of time.

Sunday is for football...so let me ask...

Let's play three questions:

1. Would you work for Al Davis?

2. Would T.O. be playing for Tom Landry, Vince Lombardi or Mike Ditka?

3. What do you suppose Gary Kubiak is thinking? (Houston's coach, they were up 27-10 with 4:10 to go and lost 31-27 to Indianapolis. Their quarterback fumbled twice and threw an interception in this time period) Do you suppose he has Chris Sims' number on Rolodex?

Remember...we are still in a recession.

I am willing to go all in and believe 100% we are in a recession. It is not the case that the bailout is going to make everything right with the stroke of a pen. No No. It is going to stop things from flying apart and that is very important to recognize. But the economy remains mired in some pretty nasty muck and jobs keep disappearing. Sorry to say it, but it is true.

Some ask why the market fell after the bail out passed. I dunno, maybe you can tell me. Trying to explain the day-to-day, no wait, hour-to-hour variation in the market is a fools' game. You want to try it...go ahead. I'll come visit you at the local mental health institution for the psychologically challenged and differently abled because that is where you are headed. This is a bash-free blog so that is why I will not call it "the nut house".

Like my dad said to me 6 months before he passed away, "Son, I'm so old, I don't go past the cemetary because I am afraid guys with shovels will start chasing me." Go trying to figure hour-to-hour market moves and the boys with the white coats and straight jackets ain't far behind.

Hello...this is the international operator...Paris is calling.

I realize many make several arguments against the bailout that passed this afternoon. I have remained agnostic regarding how it is structured but have insisted on its urgency. Great, now we can start to move on this thing.

What I will never get however is that many of the people who were the most vehemently against it are the same people who would be helped the most. I am talking about the regular guy on Main street. They were riling against it the hardest and it is his job that is going to be saved. It reminds me of the French (lovely little dears that they are). Any time any labor market reform is proposed to free up the labor market, the people who fight the hardest against it are young unemployed kids who would be helped the most. Look, I have lost enough money on horses over the years and got beaten by long shots that there was no way I could possibly have picked to win. Total shockers that leave you mumbling to yourself. I have been around and have lived life and almost nothing surprises me any more. Except what I just said above. And I still don't get it. Maybe next we will see Peta fighting anti-hunting laws?

One down...one to go.

The Senate has passed the bail out. That is good news. I know, I know, all the ornaments on that tree are sickening. Well, economists would call that "the transcations costs of democracy". Dry your eyes and vote it in. Do it.

Things always come with price tags and unpleasantries. I once went on a blind date with a girl with no front teeth. It was a bit of a shock but I had two choices. Run like hell or make the most of it. I made the most of it. Besides, she was pretty and we had a good time. I figured maybe I could talk about dentistry later. I just made sure corn on the cob was off the menu.

OK, this bill got no front teeth. So what. If it saves your job and stops a worldwide financial and economic meltdown, things will be just fine and $700 billion will be a bargain.

Oh hey, and one last thing. Few mention the fact that the Resolution Trust Corp. of the 1980s and 1990s was actually a money maker when all was said and done. If I remember correctly Congress even held hearings back then to try and indict those who bought cheap assets from the government and actually (gasp!) turned them around for a profit. This won't cost us $700 billion either in the final analysis. But few will remember it. Like Ray Donovan...indicted on page one...acquitted on page 38 in section D of the newspaper. It's all good. Just stop the meltdown.

Thanks Senator Gramm...

... in this whacky world, take your praise and comfort as it comes.

Look, our 42nd President (I capitalize the spelling out of repect for the man/woman(?) and the office) knows the score...http://online.wsj.com/article/SB122282635048992995.html

Europe has thrived and prospered for decade after decade on the banking and financial system that was created by Gramm-Leach-Bliley. Somehow, the argument goes, we can't do it and it is inappropriate for the US. It created this whole mess. Well, that is placing the blame for the situation we are in on the wrong deal.

Warning: This Blog is a Bash-Free web site. And even more importantly, it is a Senator Gramm-Bashing Free web site. You want to bash Senator Gramm or his wife Wendy, then don't let the door hit you on the way out. Senator Gramm's son Marshall is one of my best friends. In the picture above, that's him on the far right enjoying a day at Belmont with me and the legendary horse handicappers Steve Crist and Mike Watchmaker. Go ahead and click on it. We were having great fun. So check your mean streaks at the door please. This Blog is meant to be informative but also entertaining and fun. You wanna know why? Because that's the kind of guy I am.

And when it comes to economics, I know Senator Gramm...I worked with Senator Gramm...listen baby...you are no Phil Gramm.

Enough of this gloom and doom for a bit...take 3:32 and let's enjoy life.

http://www.youtube.com/watch?v=qwirWWnzJKM