Friday, January 25, 2008
I've done my best to add my voice to the growing chorus of somethingmustbedonners, and tried to warn investors as I did in the late Nineties - not that I'm wise, but I seek out the wise. This won't put off the day traders, who rush in where angels fear to tread and will try to make fortunes on the rattlesnake-fast turns of bear market rallies; some will get it right, and fair play to you, as they say.
For the rest of us, I don't think I can better the common sense, brevity and clarity of this in the comments section from Jim in San Marcos, answering an investor's query as to what to do:
The basic premise is to pay off your debts and have some spare cash in the bank. There will be layoffs.
Buying a big item right now could tie you to a commitment that could be more than you anticipated. I know of one person already that was surprised by a layoff. They didn't see it coming.
If it gets worse, a lot of people will be selling big ticket items to raise cash. There should be some pretty good deals out there.
Money isn't everything, and there are bigger issues facing us: the growing military as well as economic power of Russia and China; our failure to nurture and educate our young, which points up the selfishness of our adults; the threat to democracy that is big government combined with big business, and the growing divide between an increasingly internationalist managerial class and a resentful, paralysed underclass whose numbers grow while our economies shrink and twist. And perhaps it is not entirely paranoid to suggest that there are many (often well-meaning, by their lights) proto-revolutionaries hacking away at the cultural and social ties that bind us, still dreaming that Bakunin was right when he said that the urge to destroy is also the urge to create.
I now have to take some time out to set my own affairs in order - too many commitments, personal and professional. Good luck to you all, and thanks for reading and commenting.
Thursday, January 24, 2008
People speak of the crash of 1929, but it took much longer for the crisis to work through and there were lots of opportunities for investors to step off with smaller losses. There were also plenty of traps for those who thought it was time to buy back in.
Here's a chart (source) of the process:
As they say, history doesn't repeat itself, but it rhymes. Today's central banks are acutely aware of this past history and do not wish to be remembered for making the same mistake, i.e. worsening the situation by deliberately contracting the money supply.
However, Denninger and others think we can't stop this contraction anyway, once the credit bubble has been pricked, and attempts to reflate will merely devalue the currency while failing to stimulate the real economy.
Tuesday, January 22, 2008
Whether the Dow falls below 9,000 nominal in the course of a severe recession is something we shall have to see.
Monday, January 21, 2008
(Press Association release today.)
Less than 6%. Maybe they should raise the minimum age to be a trader.
Oh, and the PA uses the hack line "More than £x billion was wiped off the value of ... shares". Enough experience for cliche, not enough to remember history.
"See what I mean? Kids!"
It can't happen here
It can't happen here
I'm telling you, my dear
That it can't happen here
Because I been checkin' it out, baby
I checked it out a couple a times, hmmmmmmmm
(The Mothers of Invention)
There was a period of hip journalism in the 60s and 70s that thought it clever to quote pop trash as if it were Holy Writ, and I'm afraid I couldn't resist the cheek. Retro, but maybe appropriate for a rerun of the econogrind of those years.
Ben Bernanke half-joked about dropping money from helicopters if necessary; now the first $500 tax rebate parcels are on their way. Andros says we're into a Ludwig von Mises"crack-up boom" which means that nominally, assets won't fall in price, but in reality they will be eaten hollow by inflation:
“Volatility is opportunity” and it is about to SOAR! (As you will see in the next installment of the 2008 Outlook) They will “Print the money” as the unfolding “Crack up Boom” powers generational moves in grains, commodities, currencies, and stocks are on the table.
He's begging for inflation now, rather than a useless stimulant later when the mule has died.
Sunday, January 20, 2008
In advanced economies, it's important for companies, banks and individuals to receive such information, too.
But nearly 40 years later, the USA needs to re-learn the lesson. The Federal Reserve ceased reporting M3 money supply data in 2006; accurate assessment of inflation is complicated by "hedonic adjustment" and periodic (and tendentious?) alteration of the types of item included in price surveys; the Bureau of Labor Statistics seasonally adjusts unemployment figures so that an increase can sometimes appear to be a decrease; nobody (not even the lenders) yet knows the full figures on bad loans and "Tier 3 assets"; it is not even clear how we should assess a nation's wealth (GDP per capita seems a misleading measure).
How can you navigate without up-to-date information? Even in the nineteenth century, Mississippi river pilots had to keep track of the river's changes, or risk getting stranded on new sandbars. And as John Mauldin reports, party political manoeuvering is stymying two appointments to the Federal Reserve's Board, at a time when the Fed most needs to concentrate on resolving the unfolding complex financial crisis.
Even given the right data, decision-making has become tougher. Increasing global interconnection and wealth transfer between nations means that normal cycles may be broken by epochal linear developments, so the past is now a very unsafe guide to the future.
We need clarity, direction and vision.
In his excellent book (reviewed here last May), he suggests that inflation will come afterwards (actually, not just IN- but HYPER-).
Saturday, January 19, 2008
Then a newsflash cut in: the President of the USA had been shot on a visit to Dallas and had been rushed to hospital. My father went upstairs. The programme resumed.
My father came down. I still remember him buckling his belt over his uniform, as ever uncomfortable and determined to do his best, a stocky man with a straight back, now full of tension. He watched with us as another newsflash came: the President was dead.
I think the camp sent a driver with a Jeep; in any case, Dad was gone. We watched some more TV, interrupted by occasional updates and speculation. Then it was time for bed. Flannel pyjamas, cotton sheets, the heavy blankets that trapped your feet. I went to sleep.
Lights woke me, illuminating the curtains. Heavy engines, headlights passing, heading in the direction of Düsseldorf. One after another after another. Now, I know they were tank transporters, racing to position the heavy armour in readiness for the Red invasion.
And now there are no more Communists, or so it seems. We buy fuel from the Russians, hardware and toys from the Chinese. The people my father, a gentle and sensitive man, was prepared to die fighting, are our friends and trading partners. As reported by The Independent, Chinese interests even supported our Conservative leader and former Prime Minister, Edward Heath (Sir Edward protested the following week, saying the claims were "misleading and inaccurate" - but did not go so far as to say that they were untrue). Surely, we're all friends now. After all, Dad had helped the Germans start to rebuild their country; he'd worked with German civilians, learned to speak the language fluently, married a German refugee. Wars happen, and so does peace. The people of the world are vexed by their leaders, yet love for one another endures and triumphs.
But Communism is not a nation, and does not love people. Everything, even its own most ardent supporters, can be burned on the altar of abstract principle. Informed that a general nuclear war would kill a third of humankind, Mao said good, then there would be no more classes.
As gypsies and beggars used to sing:
So proud and lofty is some sort of sin
Which many take delight and pleasure in
Whose conversation God doth much dislike
And yet He shakes His sword before He strike
(The Watersons performed it on "Frost and Fire", which our English teacher played to us in the late Sixties. I associate it with cold, freshness, the musty fragrance of the Monmouthshire woods, animism, hope.)
By degrees, this brings me to the current state of affairs. Our leaders wish us to believe that the history of our fathers is at an end, and now only efficient administration remains to be achieved. The revels of democracy are ended; they were fun, but their time is past.
No: as Christopher Fry said, "affairs are soul size", still. Although I do believe that sudden and total conversion is possible, as in James Shirley's now implausible-seeming play "Hyde Park" (who would have believed the Earl of Rochester's conversion? - and there are those who still doubt it, not knowing how the sinner hates sin), I doubt that all who worked with the old Soviet and Chinese Communist regimes have abandoned their principles and plans. Like the remark about the significance of the French Revolution (variously attributed to Chou En-Lai and Mao Tse-Tung), it's "too early to say".
Even if our leaders should be gullible or merely suborned, Jeffrey Nyquist reminds us again that there are still people who think differently from us, and we must be prepared. It is not all right to be weak, whether militarily or in our economies. Good fences (and good borders) make good neighbours.
Unfortunately, we in the UK have chickened out - for party political reasons to do with its power base in the north of England, the Labour government is currently holding the baby in the case of insolvent lender Northern Rock, even though the tax payer is on the hook for nearly $120 billion as a result. (Hey, that's nearly as much as the proposed new tax break to reflate America - and our population is one-fifth the size of yours!)
Hope you have better luck - or better leaders - over there. Buy a Lottery ticket and hope?
Friday, January 18, 2008
Wednesday, January 16, 2008
Monday, he reasserted his belief in DE-flation; but as I've been saying for some time, maybe the real issue is the divide between haves and have-nots, and he deals with that, too. No point being rich if you daren't go out.
Yesterday, he sounded the bells for a possible crash today. Maybe this is when Robert McHugh's prediction is fulfilled.
Tuesday, January 15, 2008
The share price has slumped from over £12 last February to 69 pence, assisted by the gleefully gloomy 20/20 hindsight of the news media. We had voxpops today from small "windfall share" demutualisation shareholders ruefully reckoning their notional losses and admitting they can't find the (now-near worthless - ha!) certificates.
One of Sir John Templeton's maxims is "The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell."
Let me offer two of mine: "Never buy what the fund managers try to sell you at financial adviser seminars", and "Remember the journalists who had their pensions in Equitable Life with-profits, because EL didn't (ugh!) pay commissions".
If I had the spare, I might speculate on NR. Hedge funds may be able to afford losing money, but they certainly don't go out of their way to do it. I wonder what will happen?
Monday, January 14, 2008
Now that the gold dinar has been introduced in Malaysia, Lewis wonders whether the dirham should link to gold, too, so oil exporters can avoid being robbed by a falling dollar.
Brownouts and lines at the gas station again, perhaps.
Foreign governments with trade surpluses (based on artificially low currency exchange rates and stupid overspending by the West) are building up trillions in reserves and eyeing our companies and real estate. If our own leaders aren't willing to rebalance the world economy, the least they can do is get a piece of the action.
Sunday, January 13, 2008
The Dow is now 12,606.30 and gold $894.90, so the Dow is now worth 14.09 gold ounces. It has fallen by 5.78 ounces out of the predicted 6.36, so the prediction is 90.9% fulfilled so far.
McHugh will be fully correct if, for example, the Dow remains unchanged and gold rises to $933/oz; or if gold stalls, the Dow will need to fall to 12,090.
"U.K. Sold 395 tonnes of gold at an average price of $274.9 per ounce. The first sale at $254 caught (or caused?) the low point in a 20-year slide in the price of gold.
The losers are us, Brown's gold sales raised around $3.49 billion.."
-- Telegraph.co.uk , January 2, 2006
That was written when the price was $627 and at today’s gold price of $895 the position would be worth $11.4 billion. And - remember the reason for selling was to improve central bank returns - what did they buy with the funds?
I make that a loss of $8 billion to date, or £4bn sterling.
We hear a lot about accountability. If only politicians could be made personally financially accountable.
Or if they could be paid to go away. In recent times, it would have saved the country a fortune if each senior politician had been given £10 million to do nothing at all.
Saturday, January 12, 2008
Doug Noland sees the debt crisis spreading to the corporate sector; David Jensen writes a letter to the Governor of the Bank of Canada, including very telling graphs of mounting debt and the bubble in the financial markets; Michael Panzner discusses a piece from the Financial Times on the threat of a downgrade of America's historic AAA credit rating, and refers to the weakening of the USA's military pre-eminence; Sol Palha worries about the acquisition of Western assets by sovereign wealth funds ("Slowly but surely America and Europe are going to be owned by foreigners. The irony is that Congress is trying to keep immigrants out of this country but right in front of their eyes foreigners are slowly gobbling up huge chunks of this country.").
All this leads me to Jeffrey Nyquist's grim, but compelling latest piece. He despairs of the irrelevance of mainstream political discussion, especially as the polling process rattles on, and paints a far greater picture. I think you should read it all, but here are a few extracts:
What is happening in the news today, what is happening in the markets and in the banking system, has profound strategic implications... There are no invulnerable countries... If a government does not see ahead, make defensive preparations, establish a dialogue with citizens, lead the way to awareness and responsibility, then the nation stumbles into the next world war unarmed and psychologically unprepared.
Even worse, today's politics has become a politics of "divide and conquer" in which one constituency is played off against another: poor against rich, non-white against white, the secular against the religious. Before a positive outcome is possible, we must have unity and we must have reality.
It's more comfortable to ignore the crying of Cassandra, but maybe Nyquist is like Churchill in the pre-WWII political wilderness, trying to prepare us for the next conflict. We in Britain only just made it, and how we have paid for that struggle ever since.
But it was a price worth paying. History would have been very different, and very horrible I am sure, if Churchill had listened to some in his Cabinet in 1940 who advised him to make a deal with the Nazis. He said, “If this long island story of ours is to end at last, let it end only when each one of us lies choking in his own blood upon the ground.” It's a line that even now has tears pricking my eyes. The appeasers were silenced by the sound of deeply-moved men banging their fists on the Cabinet table in agreement and applause.
My worry is that I don't see men of that calibre now. As Lord Acton said in a letter to a bishop, "Power corrupts, and absolute power corrupts absolutely". Commenting on the House of Commons after the Great War, Stanley Baldwin remarked on the presence of "A lot of hard-faced men who look as if they had done very well out of the war". Today, the faces are softer, the hair expensively dressed, the manner relaxed and affable, but behind it all one senses cold-hearted, selfish betrayal. To be charitable, it may be that our leaders and ex-leaders don't fully realize the negative consequences of all their deals, compromises and consultancies.
As our reckless debt is progessively converted into ownership, we may find out how much we took our freedom for granted. It's a lot harder to get back.
The Bible has something to say on this, too (and no, I'm not a preacher, this is to show that the issues endure throughout history): Leviticus, Chapter 25 deals with debt, buying and redeeming slaves, and how the chosen people should be treated differently from the heathens - for the latter, enslavement is perpetual.
Friday, January 11, 2008
Here's a relatively recent graph of the price of gold, adjusted for inflation (admittedly, inflation can be defined in many ways):
On this chart, it looks as though gold's median price would be around $600/oz, so currently it's above trend and presumably the elevated value factors-in some economic concern.
Now, here's a chart correlating the Dow and gold:It seems harder to spot an average here, since each peak is much higher than the one before. But taking the Dow as it is now (12,606.30) and the current price of gold ($894.90), the present ratio of 14.08 ounces would be in the middle range of the variation since the mid-1920s.
So a purchase of gold now looks like a speculation, rather than a bargain.
Thursday, January 10, 2008
Wednesday, January 09, 2008
It's more serious than that, of course: James Turk quotes the Comptroller General, David M Walker's estimate that total liabilities, including commitments to future social security benefits, are around $53 trillion. The government's annual revenues are only around 5% of this figure, so the credit card looks like it's pretty much fully-loaded.
However it happens, it seems something must give way under the strain. Frank Barbera reckons the Dow has plenty further to fall (and possible interim correction or not, he thinks gold looks good). Prieur du Plessis concurs, quoting Nouriel Roubini's comment that "... a lousy stock market in 2007 will look good compared to an awful stock market in 2008."
Bob Bronson thinks the downturn will be long as well as hard. He in turn quotes the chairman of the National Bureau of Economic Research: this one “could be deeper and longer than the recessions of the past.”
Boris Sobolev also looks to gold, but prefers the smaller companies because of all the money that's piled into the majors.
In case we in the UK should be tempted by schadenfreude, Ashraf Laidi predicts that sterling will accompany the US dollar's fall against other currencies. From what I read in connection with the USA, a weakening currency may provide a temporary boost to exports, but also inflate the cost of imports; so I don't suppose that our following the dollar will do us much long-term good, either.
Of course, it's possible to dismiss all this as group-think wall-of-worry stuff, but maybe that would be double-bluffing ourselves. Sometimes, things are exactly what they seem. Banks have consistently turned a profit for centuries, on the inexorability of debt.
In simplest terms, we are concerned that the very lifeblood of the world industrial economy—net oil export capacity—is draining away in front of our very eyes, and we believe that it is imperative that major oil importing countries like the United States launch an emergency Electrification of Transportation program--electric light rail and streetcars--combined with a crash wind power program.
That is just the tip of the iceberg, surely: residential and office heating/lighting, mechanised farming, supermarket shopping, centralised medical facilities - so much will have to be reviewed and planned.
Tuesday, January 08, 2008
In the short term, we have this contest between credit contraction and currency expansion. I'm getting the feeling it'll be the first followed by the second, which is what Michael Panzner predicts in "Financial Armageddon".
Monday, January 07, 2008
... both oil and cereals are global commodity markets. If it's profitable to make food into fuel in the US, even without a subsidy, then it's profitable elsewhere also - possibly more so given lower labor costs. So the basic growth dynamics are the same. The infection just hasn't got as strong a grip on the whole globe yet, but it's growing at similar rates.
... I expect oil prices to increase in the medium term, though certainly they could go down in the short-term if the credit crunch affects the global economy enough.
... When we have a bidding war between the gas tanks of the roughly one billion middle class people on the planet, and the dinner tables of the poor, where does that reach equilibrium?
... We noted earlier that according to the UN about 800 million people are unable to meet minimal dietary energy requirements. That is 12% of the world population. [...] we can estimate that a doubling in food prices over 2000 levels might bring 30% or so of the global population below the level of minimal dietary energy requirements, and a quadrupling of food prices over 2000 levels might bring 60% or so of the global population into that situation.
... it seems likely that the most skilled Westerners will continue to give their countries a comparative advantage against emerging markets. However, there is no guarantee that these research-intensive sectors are likely to support the entire Western population, far from it. They are highly cyclical, benefiting hugely from an active stock market and venture capital market. Further there is no evidence that innovation itself, as distinct from the fruits of recent past innovations, is significantly expanding as a percentage of output -- indeed, research expenditure has if anything declined.
... Since the majority of location-dependent jobs in Western countries are low-skill it therefore follows that if governments wish to protect local living standards, they need to discourage low-skill immigration. Except in Japan, they have not been doing so; both in the EU and the United States low-skill immigration, frequently illegal immigration, has got completely out of control and is immiserating the working classes.
... the economic histories of a high proportion of the Western population under 30, except the very highly skilled, will involve repeated bouts of unemployment, with job changes involving not a move to higher living standards but an angry acceptance of lower ones. By 2030, it is possible that the median real income in the United States and Western Europe may be no more than 50-60% of its level today.
This will expose the democratic divide between those who vote and influence the system in their favour, and the rest. The class division could sharpen as "I'm all right Jack" is replaced by "One can't complain, Piers".
Sackerson awards a Prose Prize for Hutchinson's use of the term "immiserating".
... and presumably this will have an obvious effect on residential property prices. Who's for selling up and buying a caravan?
I've reported expert comment before, about the vulnerability of gold to market manipulation and speculation. I think I'll keep on sitting out this dance.
Also heartening to see my suggestion re insider jiggery-pokery echoed here:
As an aside, I still don't know what to make of the triangle / diamond in Goldman's chart (see Figure 4) other than they plan to squeeze stocks higher under the cover of low volumes over Christmas holidays in justifying their bonuses.
Sunday, January 06, 2008
I watched a programme last night about how we very nearly had the Third World War in 1983. This was a time when Russia was especially paranoid about the West's military intentions - spies were even ordered to report how many lights were on in late evening at the Ministry of Defence in London, apparently not knowing that the offices were lit so the cleaners could do their work.
Then in September, a Soviet spy satellite, fooled by sunlight reflecting off high-level cloud, reported not one, but five missile launches from America. The Russian monitor on duty ignored the klaxon and flashing screen, backed his judgment and told his superiors it was a false alarm, for which he was ultimately discharged from the Army. Wikipedia says his name is Stanislav Petrov. He's certainly worth more than the $1,000 the Association of World Citizens could afford to award him. We may owe him our lives.
Looking for updates on the gold dinar, I came across this blog by a Pakistani, in which he looks to the Islamic dinar as a way of breaking the enslavement of the world by a fiat-currency banking cartel. Irrespective of whether he's justified in his analysis of the situation, or reasonable in his hopes for such a currency, we should note the victim-perception. I seem to recall a maxim (from Sun Tzu?) that you should fear a weak enemy.
Which brings us back to the economic vulnerability of the UK and USA. Weakness can invite aggression, but also makes the weak fear an attack even when it isn't coming. Worryingly for a potential aggressor, weakness may be feigned:
22. If your opponent is of choleric temper, seek to irritate him. Pretend to be weak, that he may grow arrogant. ("Laying Plans")
I don't think you can truly be free until you are strong and independent. We need to get our houses in order, so we can deal with others from a secure base - which is safer for all involved.
... prior to the war with Iraq the Dinar was $3.00+ per US Dollar.
...Today the country is almost debt free; Iraq is one of the leaders in oil, natural gas and holds a huge amount of gold in its country.
... The Company believes in the near future there will be a revalue of the Iraq Currency, it is the Company's opinion after doing its due diligence and public statements from Iraq's government officials, that the revalue could come in at between .82 and 1.00 per US Dollar.
"Examine the disappearing equity. It came from no where and is going back to no where."
That's what happens when credit becomes a form of currency, as the bullion moralists keep reminding us.
Why are banks allowed to create so much "fiduciary money"? Who does own the Fed?
Saturday, January 05, 2008
... the present crisis is already more serious than any that has occurred before in modern times.
... Our projections, taken literally, imply three successive quarters of negative real GDP growth in 2008. Spending in excess of income returns to negative territory, reaching -1.6 percent of GDP in the last quarter of 2012—a value that is very close to its “prebubble” historical average.
... while the rate of growth in GDP may recover to something like its long-term average, all our simulations show that the level of GDP in the next two years or more remains well below that of
... We conclude that at some stage there will have to be a relaxation of fiscal policy large enough to add perhaps 2 percent of GDP to the budget deficit.Moreover, should the slowdown in the economy over the next two to three years come to seem intolerable, we would support a relaxation having the same scale, and perhaps duration, as that which occurred around 2001.
Our projections suggest the exciting, if still rather remote, possibility that, once the forthcoming financial turmoil has been worked through, the United States could be set on a path of balanced growth combined with full employment.
The conspiracy theory here is that the Fed and other central banks are a cartel that not only inflates the money supply, but has created trillions in derivatives, partly to manipulate the investment markets. "Deepcaster" accuses this cartel of engineering drops in the gold price, just when you'd think gold should be emerging as a natural currency.
He brings in the Amero theory, too - ultimate replacement of the destroyed dollar by a new North American currency, presumably so the crooked poker game can continue with fresh cards.
Can anyone please shed light on all this? For example, who EXACTLY are the owners of the Fed?
If nobody knows or is willing to tell, perhaps one of us should claim ownership - "finders, keepers".
Karl Denninger reports that the US unemployment rate has hit 5%. He thinks - and it's certainly plausible - that we're already in a recession. Especially if Rob Kirby is right, and the Bureau of Labor Statistics (BLS) is lying about the scale of job losses in the financial industry.
Friday, January 04, 2008
Now, Jeffrey Nyquist treats us to another Sino-Soviet frightener, and Nadeem Walayat sees even more potential enemies, who may not refrain from below-the-belt blows. The enemies of the Open Society abide. Are our Western politicians prepared? Will they defend us?
Taking the present values - Dow 13,056.72, gold $864.80 - the formula works out at 15.098, which suggests that the Dow is still well above trend.
Some would see this as indicating a coming gold spike; but another way to rebalance is for the Dow to fall. As credit deflation takes hold, I suggest that in 2008, both gold and the Dow will drop below their current levels, but the Dow more than gold.
Gary Dorsch is looking at the same ratio ("By the end of 2008, the DJI to Gold ratio might tumble towards 10 oz’s of gold"), but thinks the rebalance could happen the other way, through destructive inflation.
If so (and he doubts that it's possible), Karl Denninger thinks you'd still be better off betting on the Dow, using call options:
So tell me again - if you believe in "hyperinflation" - why do you want to buy the clear LOSER of an asset that metals represent, when you can buy index CALLs and, if your thesis is correct, you will make an absolute stinking FORTUNE!
(Of course if you're wrong and the DOW is under 16,000 by the end of the year, that $20,000 is totally flushed. That's the price of poker - but again - just how sure are you that "The Fed" is going to "hyperinflate"? And by the way, no, I don't think they are - in fact, I don't think they CAN.)
Gary Tanashian sets a target of $920 for gold, but anticipates a drop-back anytime; but longer term, Julian Phillips can't imagine governments NOT hyperinflating, to avoid the horrors of deflation.
The astrologers continue to mutter and gesture over their charts.
His view: housing is woeful, emerging markets look as though they may be topping-out, the Ted Spread is signalling insolvency fears, the 10-year bond rate augurs slowing growth; so cash is king.
I think it's in "Jane Eyre": a teacher who wishes to instil piety into a little boy, asks him whether he'd rather have a biscuit or a blessing. When he answers, a blessing, he gets two biscuits.
When recession empties the the biscuit barrel, maybe we'll get authentic leadership.
My beloved recalled it better, and so I've found the quote on the Net:
...I have a little boy, younger than you, who knows six Psalms by heart; and when you ask him which he would rather have, a ginger-bread nut to eat, or a verse of a Psalm to learn, he says: "Oh, the verse of a Psalm! Angels sing Psalms," says he. "I wish to be an angel here below." He then gets two nuts in recompense for his infant piety.’
It seems that we must wish our own countries a spell of hard times, in order to stimulate the changes that will defend us from permanent ruin.
Thursday, January 03, 2008
Few are brave enough to come out and declare the start of a bear market; but the watchword is "proceed with caution".
Wednesday, January 02, 2008
When things turn vengeful, let's take a careful look at the banks, and those who give them their orders. Not for the first time, they've lifted us up, and are making ready to drop us from a great height.
As the song from Mary Poppins has it:
If you invest your tuppence
Wisely in the bank
Safe and sound
Soon that tuppence,
Safely invested in the bank,
And you'll achieve that sense of conquest
As your affluence expands
In the hands of the directors
Who invest as propriety demands
You can purchase first and second trust deeds
Think of the foreclosures!Bonds! Chattels! Dividends! Shares!
Bankruptcies! Debtor sales!
... for the whole lyric see here.
The scene ends, happily enough, with a run on the bank as young Michael loudly demands the return of his twopence.