Wednesday, October 6, 2010

What If The Culture Dies

When the shills on the propaganda network come out to tell you how things are better and how consumers are de-levering their balance sheets, don't expect the boobs and boobs in chairs on the set to ask them why personal bankruptcies filings climb 11% . If this is de-levering then the shills are 100% correct.  Just thought I might share this little tidbit of news that was released Monday but got lost in the shuffle of the Bank of Japan news yesterday.

I came across this piece out of the Telegraph in Britain entitled Savers Told to Stop Moaning and Start Spending.  It seems the Brits have taken a page out of  our idiocy playbook, in particular the George W. Bush playbook. Surely you remember how after 9/11, he urged us to shop to keep the economy from falling into a recession? Do you also remember  the 2008 tax rebate, those $300 stimulus checks, most of us never got? Compassionate conservative right W.? More like Keynesian loon but I digress.
Yes these are the men in charge of things, which got me to thinking about Charlie Munger's comments the other day which you can read from my piece Charlie and Warren, Birds of a Feather.... In particular Munger's line regarding the bailouts, those things that rewarded avarice, greed and abject lunacy while penalizing prudence, moderation and thrift, Yeah that bailout in which as we all now know he said, 

"So I think when you have troubles like that you shouldn't be bitching about a little bailout. You should have been thinking it should have been bigger."

Forget the fact that without the bank bailouts Charlie and his Oracleness Warren would have had their proverbial  ass's  handed to them. Now if that is not enough to boil your blood the quote I want to focus more attention on the Marie Antoinette comment where Munger says:

“You should thank God” for bank bailouts, Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies.”

I want to focus on the 'culture dies' aspect as it seems Munger is worried about the culture dying? Bailouts are okay for your holdings Charlie but the culture is at risk if anyone else gets them. Did I compute that correctly? How quaint Charlie.

Lets talk about that culture. 
  • A culture where former Fed officials publish privileged info before it is publicly disseminated. 
  • A culture where former CEO's who have run their ship aground exit with tens and hundreds of millions only to leave the mess for the rest of society. 
  • A culture where you can close dealerships with no published criteria for said closures and no one blinks an eye. 
  • A culture where you can suspend mark to market accounting because you simply don't like the numbers from the market. 
  • A culture where credit ratings for financial instruments are for sale to the highest bidder. You're intimately familiar with this Charlie as you hold a stake in Moodys)
  •  A culture where banks hide non-performing assets in off balance sheet accounts and SIV;s (structured investment vehicles)
  • A culture where banks foreclose with forged documents. 
  • A culture where the former head of the NY Fed, (forget that he can't remember to pay taxes) who was responsible for policing the banks and brokers in his district, fails to do so as they spectacularly blow up and what is the result? He is promoted to run the Treasury.

So what if the culture dies Charlie? It is a culture that only a criminal could support. The lawlessness we have lived with and are seeing in full regalia on a daily basis is fine so long as it furthers your ends and pads your compounded annual rate of return at Berkshire right? you shallow, self-absorbed hypocrite. 

Either we are in the Twilight Zone and Rod Sterling has yet to show up or maybe just maybe it really wouldn't be so bad if this so-called "culture" actually does die. 

Did I remind you that you are in the running for Hypocrite of the Year Award. You still have a healthy lead.

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 2 units Direxion Small Cap 3X Bear ticker TZA @ $60.30
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $60.50
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 2 units Ultrashort Xinhua China ticker FXP @ $42.45
Long 1 unit Ultrashort Real Estate ticker SRS @ $49.10
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Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $22.52
Long 1 unit ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $92.15
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Short 1 unit Amazon ticker AMZN @ $160.00 stop @ $162.11
Short 1 unit Baidu ticker BIDU @ $103.45 stop @ $105.11
Short 1 unit of Apple ticker AAPL @ $287.65 stop @ $290.61

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