[Swiftwater Gazette] We're In The Best Of Hands

[Brad Haslett]

Just stumbled across this post this morning (below - from the guy who
coined the term blog-sphere) and it summed-up my mood perfectly.
Looking around the horizon, nothing looks attractive but to get out of
US dollars and US based companies without a substantial foreign
revenue stream (preferably Asian). I've been corresponding with a
fellow airplane owner who manages large commercial real estate
properties in California and he agrees with me, the deflationary
period will continue for hard assets, followed by rampant inflation
when the Chinese start no-showing Treasury auctions. If the current
administration has a plan at all, it is to print money. The buying
process of the condo in Destin (in theory from individuals but in
reality from a major bank) has been insightful.  The banks are playing
games with their accounting.  If they were forced to recognize their
non-performing mortgages they would be insolvent - that is precisely
why there are millions of "short-sales" available in CA and FL and not
foreclosures. Commercial real-estate is next followed by municipality
funded pension plans. Assuming municipalities use "creative
accounting" to work around their problems, inflation will eat away at
fixed retirements (myself included) anyway. No politician or party has
the guts to face the problem head-on, encourage the nation to endure
the short-term suffering and get on with life.  Half the TARP money
has disappeared into thin air, never to be seen again. Studying the
history of finance of the Western nations for the period between 1914
to 1929 has been fascinating, but rather depressing at the same time.
We never learn.

Interesting times these are!

Brad

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Sometimes economic fundamentals get flushed by waves of hideously
depressing non-economic data, and markets cease to care about anything
but the train wreck that appears to unfolding in front of us. Then
it’s time to go to cash. This is such a time for nemo.

Actually, my perception of economic fundamentals has been getting
bleaker by the second, anyway. In spite of an alps of newly-minted
cash, the possibility that producers may not be able to mandate
pricing finally forces me to accept the possibility of long-term
deflation, something I had not thought could happen in my lifetime, or
yours either. Having overconsumed for so long now, and unable to
leverage their assets or future earnings (if any), Americans may well
dive into a savings frenzy of Japanese dimension. But that is not
important now.

It is important that the nation is suddenly awakening to the
possibility that the president has no real plan for anything
whatsoever, and never did. He literally seems to be making it up as he
goes along, and his strategy is to do nothing at all but
procrastinate.

In the recent past, we have watched the White House and its branch
offices gaze glassily past Iran, the Taliban, North Korea and Moscow
in hot pursuit of their real enemy, which appears to be the dissenting
media.

Economic policy, formerly the purview of rooms that at least contained
Larry Summers, is now directed by a Chicago-hood playground pal named
Valerie, and its focus is on the compensation levels of 200 people.

Joe Biden is the commander in chief.

The national health care bandaid will provide improved coverage for a
group estimated at between 5 and 20 million people, some of whom are
US citizens, at a cost of roughly an MRI machine per newly-covered
patient.

The “most ethical Congress ever” — well….

And in the words of W. H. Auden:

“In the nightmare of the dark
All the dogs of Europe bark,
And the living nations wait,
Each sequestered in its hate….”

A deep and chilling foreboding pervades nemo’s soul. Let the market do
what it will. We had previously said that however rosy the possibility
of 14,000 might be, the risk was too great. When you think there’s a
chance that the driver might be drunk, how hard is it to get you to
get off the bus? Well, here’s the next stop. I suggest you disembark
before this thing goes off a cliff.