I want to start off by saying I was having a wonderful morning. Absolutely wonderful till I came to Mish's site. I want to thank him, (though I wish he hadn't), for bringing my attention to the following article in the NY Times by Harvard economics professor Greg Mankiw entitled It May Be Time For The Fed To Go Negative.
Please read the article as it is sheer lunacy plain and simple. Negative interest rates dear reader, negative interest rates !
Regular readers know I have ranted and raved at the abject stupidity emanating from purported institutions of higher thought such as Harvard. I have also been the recipient of much, sour grapes, just jealous as you could never hope to get in Harvard type email in response to said rants.
Well I should thank my lucky stars for such good fortune as to not get into 'a Harvard'. I actually feel humiliated for the easy marks who are the parents, those who continue to write tuition cheques to Harvard and their ilk when they have cats on the dole like Mankiw. Believe me, when you put out garbage like the above piece by Mankiw, dole is the only word I could find that might properly describe what collecting a cheque for that type of work is.
Oh yeah, freeloading would suffice too!
Is it any wonder that we are in the sh*%$ can we find ourselves with men like Summers, Geithner and Bernanke at the helm. We could only be so lucky to have Jack the bricklayer or Susie the seamstress who not only runs their own business and are on the front line in the economic trenches, but uses a sharp pencil and paper to calculate his/her figures! More importantly this calculating is done on the basis of sound math, (1+1 does not equal 4 no matter what credit rating it carries) sound thought and recognition of potential consequences rather than self aggrandizement, accolades and chair-ship nominations.
Professor Mankiw, here is a word you might add to your vocabulary.... consequences.
I have often said that books will be written about this era of finance and future generations will marvel at the asininity of our 'leading lights'. These future readers will slump in their reading chairs dejected as they read how professors of Ivy league colleges not only stood by while the debacle was perpetrated front and center but then offered up recommendations that accelerated the ruination !
I have asked where are the adults numerous times, is no one sane left among us? I have been in a quandary as I have vacillated between the following extremes. Either they know what they are doing and are complicit in the theft and pillaging of the system or they are so absolutely stupid and haven't the slightest clue what is happening.
You tell me.
Of this much I am certain. You poor parents who write your cheques to Harvard I say STOP and STOP IMMEDIATELY !
I would humbly suggest you remove your celebrated son or daughter, nephew or niece ASAP. Next up you give them a lump sum cheque for the remainder of their tuition so they can set themselves up in their own business. If they were smart enough to get into Harvard they, and you, are smart enough to come up with a business idea. Now hear this, succeed or fail these "children of the real world" will learn more from this experience than they ever possibly would or could dream of from idiots like Mankiw and his former boss at Harvard one Larry Summers.
Yes, dear Harvard parent, even if the child fails in running this small business he/she will have learned invaluable do's and don'ts of the REAL WORLD. I have a high degree of confidence that the good Professor Mankiw would run a lemonade stand into the ground if left to his own devices and worse would do it over and over again because 'he knows better'.
Not only would he run it into the ground but he would do it coutesy of your money (taxpayer) as he would most certainly take his lender down via his 40X leverage in the default swap arena secured by his nomimal money market cash balances. Nothing to fear as its not insolvency just some illiquidity (right Steve Forbes !) which can always be rectified with low to no interest TARP money from the Fed, ooops sorry taxpayer.
Is anyone besides me getting sick yet ?
Listen, the sooner idiots like Mankiw are out of work and as far away from our children the better we will all be. You want to talk about to catch a predator,how about an economic predator!! Actually Professor Mankiw could be a wonderful covert CIA operative. He could be strategically planted inside the upper echelons of finance of one of our enemies where he could spew his garbage and wreak havoc and mayhem amongst their populace and economy! yes, that's it !
Tom Clancy couldn't write it up any better.
Late Friday I was stopped out of my SKF position at $57.30 for a loss of just over 2pts on 1 unit.
Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".
Long 1 unit of Ultrashort Real Estate ticker SRS @ $27.05 stop @ $25.24