What fresh hell is this?
- The NYSE breadth line (advancers minus decliners) has definitely turned down, after all these months of it rising relentlessly. And if you want to know HOW many months, I am looking at the chart in Barron's right now, and it goes back to April of last year. And here is today's Mogambo lesson in market lore (MLIML); when there are more shares being bought than are being sold, as indicated by the breadth line, then the prices of shares usually follows that trend.
Well, to be fair, I only came to that conclusion after analyzing the data with The Highly Scientific Mogambo Method Of Data Analysis (HSTMOMDA), which is to randomly stumble upon a graph of some kind, and then one of the three remaining neurons in my brain sort of half-heartedly fire and sizzle in some vague, primordial inkling that maybe this is somehow important, and then the other two neurons take a look a this sudden activity and figure that something must be significant and they will, too, try and comprehend it all. Putting all of this together, I will take precious Mogambo time (PMT) out of my busy, busy day spent writing letters to my Congresspersons ("Dear Senator or Representative, Watch the money, butthead! Signed, Affectionately, The Mogambo"), to say that I can only surmise that the stock market is in for losses for quite a while if sellers keep outnumbering advancers. Maybe. But only if the government cannot find another way to keep this stupidity going.
That, of course, brings us to the amount of debt that the Treasury has been issuing of late. You can tell by the way alarm bells are ringing, sirens are blaring, buzzers are buzzing and the way that I am running around covered with body armor that this is getting weird and scary, and the weirder and scarier it gets, the weirder and scarier I get. In real numbers (and remember that these come from the Treasury itself), they have issued $84 billion freaking dollar's worth of new national debt in 28 freaking days! Not even a whole month! 28 lousy days! If it was February, well, then, yes, it would be a whole month! But this is March, which has 31 days in it, making it three days short of one freaking month! $84 billion in less than a month! I am now going to put this paper bag over my face and breathe slowly in and out, and perhaps I will stop hyperventilating about this now, and if I don't, then at least the paper bag will muffle my screams a little bit.
So who is going to buy all of this enormous and rising, always rising, debt? Not me, mostly because I don't have any money, and even if I DID have some money I would not buy US government debt at these prices! And since I am a really stupid guy, and maybe (according to family and friends) the most stupid guy in the whole world, if this avoidance of US debt is obvious to me, imagine the clarity with which somebody with normal intelligence (or above) can see it, too!
To that end, a reader in Houston suggested that I visit the site of the Depository Trust & Clearing Corporation (DTCC). They say that they provide "clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities and over-the-counter credit derivatives."
And they are a pretty big outfit,
as they crow about how their depository "also provides custody
and asset servicing for more than two million securities issues
from the United States and 100 other countries and territories."
I allow myself to be entranced as their dulcet tones sound pleasantly productivity-enhancing and wonderful when they say, as they talk about their own glorious tomorrows, "It is a future in which technology will be driving -- with greater force -- new ways of doing business, where the time it takes to settle trades will be reduced to minimize risk and where" and here is where I stop the tape. In fact, I leap to my feet and shout out "Stop the tape!" Before continuing, I caution you to buckle your seat belt, because I was totally unprepared for what lay ahead, and look what happened to me! Do I look normal to you? I'm hideous! Don't look at me! I mean, here we are, taking a nice little drive in the car with the top down on a beautiful Spring day, taking about enhancing productivity and low-cost capital and having a terrific time, and then, well, I won't spoil it for you, but pay attention because it is the crux of the whole thing, "trading volumes will continue to escalate almost exponentially". My life flashed before my eyes! And if you are at all familiar with graphs that go up exponentially, which is merely pictorially showing you that something has been rising exponentially, you, too, will be alarmed and you, too, will start screaming "The Mogambo was right! We're freaking doomed!" and then we are both clutching at our chests and gasping for air. And then it gets worse when you realize that one day, and soon, the amount of money that will be needed to be created to keep this huge Ponzi scheme going and trading hands will be hundreds of times bigger than today, then thousands of times bigger than today, and then millions of times bigger, and then billions of times, and then trillions of times bigger, and then quadrillions of times bigger, and then, hopefully, it will be Friday and we can take the weekend off to live it up like there is no tomorrow, because it looks like Monday will be that day referred to in that timeless expression.
And now you want me to tell you, again, the benefits of owning gold and silver? Or are you savvy enough to have figured that out for yourself?
- In Germany, which is a country in Europe that is full of Teutonic guys who were once so tough and smart to almost conquer Europe twice in one century, have apparently decided to atone for their inherited sin-by-association with Adolph Hitler by acting like buttheads ever since. To wit; German Chancellor Gerhard Schröder has announced plans to "cut the tax rate paid by businesses in Germany in a bid to stem the flow of companies leaving the country and taking advantage of more favourable rates in Eastern Europe." I notice that I have lost the source of this quote during my cutting and pasting and beer-drinking frenzies, but judging by the spelling, they are obviously European, if that helps.
The brilliant, brilliant idea is that the corporate tax rate in Germany, now 25 percent, would be cut to 19 percent. This is a 24% reduction! They can suddenly afford to cut taxes by 24%? Then why in the hell have they been at 25% freaking percent all these years? But, better late than never, right? And remember that these are the guys who are, right now, showing an annual trade surplus of $196 billion! And running a budget deficit of almost 4%, which is 33% past the limit, according to EU rules, which everybody is breaking, so what the hell? The point is that, maybe, they can easily afford a nice, hefty tax cut, right?
Not so fast, my little buckaroo! Just to make sure that we completely comprehend the total situation, we later learn that total, aggregate taxes will not actually be cut! "The German leader made clear that the loss of revenue caused by the tax cut would be offset by closing other tax loopholes and would therefore not worsen Germany's budget deficit situation, which is already over the EU's maximum permitted level." Hahahahaha! I love this stuff! They already have a budget deficit of 4% of GDP, but they are now going to cut corporate taxes, and then make up for the loss of tax revenue by (insert a drum roll) increasing the taxes on OTHER money! Hahahaha! Like everybody with money sitting in these loopholes are going to sit still and watch, oblivious and clueless, as those loopholes are being closed, and then they will be out such a gigantic gob of money that it completely makes up for slashing national corporate taxes by 24% freaking percent! I haven't seen any figures, but it has GOT to be a big chunk of change (BCOC)! And then these investors are going to sit around in their Rich German's Club, which will probably not be called Rich German's Club, but they will probably call it something more like "El Club-o Deutschelander Herren Euros Got Gaplenty" or something, and they will be whining and complaining to their accountants and their lawyers and their insider friends in the government, kvetching about how they should have seen this coming and warned them, and boo hoo boo. Right. Like THAT'S going to happen! Trust me when I say that money is ALREADY moving.
The problem faced by Germany is that other countries are taxing at much lower rates. I don't know how things are with you and your work situation, but as for me, seeing as how the evidence of my embezzlement and incompetence are sure to come out, now that money is tight and suddenly bigwigs from the corporate offices are snooping around in our books and asking all kinds of questions like, for instance, why I am using company money to hire exotic dancers as receptionists, I am happy to get the chance to relocate to some other country where nobody knows me, to save the firm gigantic wads of tax moolah! Did I say happy? I meant delighted!
And somehow, in all the hubbub of relocation, all of our files are accidentally destroyed, or lost, or both, in the transition? And I could end up looking like a hero? Maybe even get a promotion? And a raise? Whoopee!" And it is not just The Mogambo who would be thinking this way, but many others, too. Thus the Hot New Idea (HNI) of cutting taxes to dissuade us from doing that.
And next, proving once again that it never rains but it pours, here is a perfect example how the economy gets distorted: He also announced a "two billion euro investment in transport infrastructure to boost the ailing construction sector in Germany." Okay? Now, the money is borrowed and spent on, ostensibly, something involving roads, or bridges, or trains, or airports, or buses, or something that moves, probably more police cars to follow The Mogambo around and make his life into a living hell, pulling me over after a high-speed chase and demanding to see my driver's license and how he is pretty sure that I am not allowed to drive around town wearing nothing but a bath towel and a plastic shower cap, and I politely remind him that that was the same thing he said about riding around on the motorcycle, and any yutz walking down the damn street can see that my car is NOT a damn motorcycle, but then again maybe the police officers around here are not as smart as any yutz walking down the street, and then he goes berserk on me, yelling and screaming and writing more tickets, while, of course, The Mogambo is playing it cool the whole time, calmly and loudly telling the policeman that he was a filthy fascist pig helping the soulless government grind the blood of the proletariat to dust, in case he hadn't heard about it, which, apparently he had, since he kept yelling at me to shut up, shut up, shut up!
And I also remind him that in Germany he would have no jurisdiction over me at all, and I could tell him to bite my butt! And then we could dispense with this whole police-brutality thing, and everybody could get on with all of that transportation-related spending, and then the economy gets another nice little jolt, and maybe tax revenues will, hopefully, take a little bump up, and everybody is finally happy, and Germans are all driving around in their new Mercedes or Porsches or something, and the economy, somehow, grows healthier and healthier and stronger and stronger and The Mogambo looks like a big fat idiot because he said the economy would NOT get healthier OR stronger because the construction industry becomes the damned economy, which distorts it, and prices will rise because of this and the tax cuts and the deficit spending, and the rise in inflation will more than offset any beneficial effects, and they all sit around eating bratwursts and drinking beer and saying hurtful things like "Der Mogambo ist grosse big doodoo-head!" We shall see who laughs last!
When I look around for guys who would normally support me in the argument, and maybe even agree to show up as a witness at my trial, I could perhaps count on James Cook, of Investment Rarities, to stand by my side if I promised to stay downwind of him and not try to borrow any money from him, as I notice that he obliquely refers to this very thing in his weekly column, this one entitled "Inflate or Collapse", as he reminds us of a truism about (pause for breath) this very subject. He writes "The great Austrian economist Ludwig von Mises put it this way, 'The attempts to lower interest rates by credit expansion generate, it is true, a period of booming business. But the prosperity thus created is only an artificial hot-house product and must inexorably lead to the slump and to the depression. People must pay heavily for the easy-money orgy of a few years of credit expansion and inflation.' "
And here is the Big Freaking Question (BFQ), "Where will construction workers get their income money next year?" Oops! Hahahaha! Or, since we are talking about the Germans, perhaps it would be more apropos use the original German phrase, "Kaputgemachtlaughingscrewup!" Hahahaha!
- The day after the Fed increased the Fed Funds rate by another quarter point, and cited increasing inflationary pressures as part of the reason, the dollar went up! The price of oil went down! And gold went down! Amazing! I know these things because I was looking out of the bullet-proof porthole of the Mogambo Bunker, as I wisely had barricaded myself inside, expecting riots to break out in the streets any moment, as the population suddenly realized that big idiots are in control of our money, and they are ruining it. But not much happened, and the only excitement was firing off a few warning shots at a pesky neighbor kid who was getting a little too curious about the Mogambo Fortress Bunker to suit me, and then having to deal with the neighbor himself because a few lousy rounds went through his stupid dining room wall, and although I was really drunk, I clearly remember telling him about the inevitability of collateral damage, and suggesting, in a nice way (and here is the exact quote to show you what a sweetheart I am), "Maybe your wall is damaged because you're just a bad father, bozo, since you can't seem to control your own bratty kids!", and then he's screaming at me so loudly that I got a headache! Like it was MY fault or something!
My head is pounding, and I am having a hard time believing my own eyes. Although inflation is picking up and making the Federal Reserve talk about it in the statement that accompanied their decision on interest rates, oil is DOWN over two dollars a barrel! gold is down another six bucks! Stocks are up! And bonds, and this is the part that is really, really freaking me out, are also up! The Federal Reserve just raised the Fed Funds rate, and they are now actually talking about the rise of inflation, and they are goosing the money supply as fast as they can by keeping interest rates as low as they can! And yet, and yet-- AND YET! --bonds are UP in price, making the interest rate go down! I shake my head in disbelief! People, ostensibly sane, rational people, are now buying long bonds so that they can lock in the lowest interest rates in a generation? At the exact same time as inflation and interest rates are both moving up, and the dollar is going down? All of which guaranteeing these morons a real, inflation-adjusted capital losses for a long, long time? Are these the "professional money managers" we have heard so much about? Yow!
So why the sudden apparent interest in dollars and dollar-denominated assets? I figure, of course, government interference and meddling in the market, pandemic mental illness and probably a good half-dozen conspiracies of different sorts. How else to explain it? I mean, interest rates are already negative (meaning, of course, that the interest rate is less than the rate of inflation), and the Federal Reserve has raised interest rates in response to rising inflationary pressures, and yet somehow, I don't know how, maybe with mirrors or something, the damn dollar went up because the Fed Funds rate was raised by a lousy quarter point! So, and you can check the math on your own time, but when you are in MY class, we use MY facts and figures, and I say, unequivocally, that whatever these idiots buy with those dollars will be worth less in the future. Bonds? Down in price as interest rates rise. Stocks? They can't do well, since the only reason for the Federal Reserve to raise rates in the first place is to combat inflation by slowing down the freaking economy, which means that the damn Fed is trying to guarantee that earnings will go down! Housing? With everyone making less money, how long can a bull market in a very, very, very expensive asset keep going up?
And, in the saddest indictment of the mental capacity of today's "investors", even gold went down! From Reuters we read "U.S. gold futures opened at a 5-1/2-week low Wednesday as the dollar surged against the euro following yesterday's Federal Reserve quarter-point hike in interest rates and signal that it may step up the pace of interest rate rises to counter inflationary pressures." The Fed is worried about inflation, and plainly said so! The Fed has been actively encouraging monetary inflation, insanely promoting monetary inflation, diabolically achieving monetary inflation, and so roaring price inflation is the next step. And yet, AND YET, gold, the one sure-fire hedge against the ravages of inflation, went down? It went DOWN? Gaahhh! I suddenly remember what I said about mental illness! It's everywhere! Quick! To the bunker! Lock the door!
- If you want some earth-shaking news about beautiful celebrities (and who doesn't?), I have some good news and some bad news. The bad news is that I have no news about celebrities, and in fact my only contact with them is that I occasionally write to beautiful actresses, asking them to send me some money or a pair of their panties, but they are all so stuck up and snooty that none of them has ever sent me either! Or ever even written me back, for crying out loud! Although, I must admit, I have heard from some of their lawyers. But since they are a pretty unfriendly bunch, too, I have nothing good to say about celebrities.
But the good news is that I actually DO have some news, and this news is, as advertised, earth-shattering, meaning, of course, "bad news", and I am not interested in how it is oxymoronic that it is "good news" that I have "bad news" and how you feel you were misled, and I somehow "tricked" you, and now you feel cheap and used, and how you suddenly realize that The Mogambo is a big fraud, although I prefer the term "happy huckster", although I am sure that I will have no more luck in getting that phrase universally adopted than I did in getting myself referred to as a Honky-American, which I like a lot better than "white guy".
So, to prevent these kinds of unwarranted, scurrilous charges, I will quote Mr. Gaffney, writing the Daily Pfennig column, directly. "A story was printed in the Beijing Daily yesterday, which said China will change the yuan's peg from the dollar to a basket of eight currencies and widen the band in which it is traded starting in May."
See? Didn't I tell you that it was earth-shattering? The yuan is to be unpegged from the dollar in piecemeal fashion starting in May, two months away! Of course, the other countries whose currencies are also in the new currency basket may object to having the US dollar in there stinking up the joint, as they will be, in effect, pegged to the dollar by virtue of being in a basket against the yuan. I mean, if these guys are supposed to be ramping up their consumption so that the world's output can still be bought by customers (now Americans, soon them), and seeing as how we Americans are nearing the end of our ability to accumulate more debt and now we are living on printing more and more dollars, thus guaranteeing that all dollars will become more and more worthless, then they are going to need a strong currency, so that they can buy imported stuff, like oil, cheap. And the last thing they need is for the American dollar to drag them all down.
But this basket of currencies will, hopefully, keep the dollar from collapsing quickly, which is what everybody fears, and it will give everyone time to adjust. To tell you how well this will work out, I remind you that every time somebody on an episode of Perry Mason needed "just a little more time", somebody always got killed.
He goes on to say "The Beijing Daily, citing unnamed sources, said that the government will allow the renminbi (yuan) to fluctuate in a range of between .6% to 1%." Yow! If they allow a one-percent fluctuation in, say, one day, then the gains and losses of the whole world are going to be very, very, very affected, as they are all operating with unimaginably huge amounts of money, that immediately affects all the rest of the world's money, and many of whom are operating on gigantic leverage and margin! I mean, if you only have a penny down on a dollar bet, then a one-percent move will completely wipe you out, dude! "Currently," they add. "the currency is only allowed to fluctuate .3% above and below the pegged currency rate."
If you have any dollars in your wallet, take your wallet out, open it up, and yell at the money, "Run for the hills, dude!"
- In a delicious irony, Henri Klingler sent me, out of the blue, one of his tongue-in-cheek silver "Confederate Dollars" because he thought I would be interested in it, which I was, because it is kind neat looking, and it is an ounce of .999 pure silver, and it was free to me, so I am showing a net profit on the deal by just going to the mailbox, which I do every day anyway! Man! This is neat!
Then I noticed that the coin was struck in 2002. What was the price of silver in 2002? Well, I could find out, but if I did, then I would have to get up off of my big fat butt and do actual research, and if I got up off of my big fat butt then I would NOT be The Mogambo, but I am sure that silver was lower in price than it is now, and that is my whole point here. This "Confederate States of America" money is a money that has appreciated in value in the last three years, while the US dollar has gone down in value! Hahahaha! How ironic! The South shall rise again! Hahahaha!
- Paul Craig Roberts, who is the Former Assistant Secretary of the Treasury in the Reagan Administration and Associate Editor of the Wall Street Journal editorial page, sees me and my hoodlum friends down at the far end of the playground, huddled in a circle, smoking cigarettes and talking about the dollar. Being the new kid, he figures that he could break the ice and maybe make some friends if he had a few choice worlds to say about the dollar, too. So he says, "The dollar's value and status as reserve currency cannot forever stand the trade and budget deficits that are now part and parcel of America's economic policy. Unless there are major changes soon, America's economic future is a third world work force with a banana democracy's worthless currency."
And we all say "Exactly, dude! You're OK with us!" and everything was fine and we were all laughing and telling jokes ("Did you hear about the guy who started dating dollars? He heard that they always went down! Hahahaha!"), and we were smoking and coughing and hacking up brown phlegm and having lots of fun until recess was over and we had to go back into the classroom. But it wasn't all bad, as that is when the teacher read from a book by James Turk and John Rubino, The Coming Collapse of the Dollar. Her voice was crisp and clear as she read, "Whether ancient or modern, monarchy or republic, coin or paper, each nation descends pretty much the same slippery slope, expanding government to address perceived needs, accumulating too much debt, and then repudiating its obligations by destroying its currency."
So how is the destruction of our currency abiding? Well, James Cook figures that "The inflation rate that covers everything is (my guess) at least 10% annually." That is about what I guess, too, mostly because it sure feels like it.
- Richard Russell, of the Dow Theory Letter, writes that Edson Gould of Anametrics is the guy that formulated the "Three Steps and a Stumble" rule. Well, personally, I did not remember who came up with the rule, but I have read it many, many times over the years since I was but a humble grasshopper seeking enlightenment and failing miserably, and now I am more educated as to economics, I am angry than ever and transcendent serenity seems far, far away.
In case you never heard this "Three Steps and a Stumble" rule, he explains that "The formula runs like this - whenever the Fed raises the discount rate, the margin rate or bank reserves or any combination of those three, a total of three times, you must be on your guard, because the market usually tops out after such Fed action."
So where are we now in terms of this rule? Well, Mr. Russell says, the "third step" occurred on September 14, 2004, when Fed Funds were raised for the third time in succession. And of course, there have actually been more raises in rates since then!
Why am I bringing up this old "three steps and stumble rule"? Well, he goes on to say "The S&P 500 recorded its high on March 7, 2005 at 1225.31. That occurred six months after the 'Three Step' signal. And I wonder - WAS THAT THE TOP? I'll have to say yes, it was, at least until proved otherwise."
This is in total agreement
(or, as they say on the West Coast, "It's, like, totally
in sync, dude!") with Eric Fry of the Rude Awakening column,
who writes that, "It is true, of course, that rising rates
are not usually a great thing for asset prices. But they are
not always disastrous. To generalize, FALLING interest rates
tend to encourage speculation in all manner of financial assets.
Conversely, rising rates tend to reacquaint investors with the
concept of risk-aversion. And a risk-averse investor is usually
a seller of speculative of financial assets like emerging market
stocks and bonds, as well as U.S. junk bonds and small cap stocks.
In short, the riskier the asset, the more damaging the effects
of rising rates...at least that's the conventional wisdom."
- The Big Question is whether the next rate increase by the Federal Reserve will be a quarter point or a half point. Up to now, it has been nothing but quarter points. Well, when the Funds rate was at 1%, a quarter-point move was a 25% increase! Now, with the rate at 2.75%, a quarter-point is only a 9% increase! Hell, a whole half-point increase would be only an 18% increase in the rate!
- David Bond, of the Silver Valley Mining Journal, has spoken with Hugo Salinas-Price, the guy behind the movement to re-introduce the silver Mexican peso as legal-tender money. I don't speak or understand Spanish, but by reading his lips it seems to me that he is saying that The Mogambo was right when I said that the drive to introduce a silver Mexican peso would fail. Well, Mr. Salina-Price did not actually say that in so many words, but you could tell that is what he was thinking when he said that Mexican House Ways and Means Committee has killed the idea. Mr. Bond notes that the Mexican government thwarted the "hugely popular drive to re-monetize silver and put some credibility and passion behind the peso. It defied the will of every state governor in that country; defied the will of the Mexico Congress itself, which in polling supports silver money;(and) defied the desires of the nation's most astute journalists."
- Bill Bonner, who seems to have a natural comprehension of inflation that may explain his exalted position at the DailyReckoning.com site, writes "From barely 100 following the crash of '29, the Dow is now over 10,000. Who can doubt that the tendency is up? Yet, adjusted for consumer price inflation, the Dow is only about 500." So what is the real gain of 500% over 76 years? It comes to 2.14% a year! Hahaha! You think you are going to fund a retirement by growing your real, inflation-adjusted wealth by 2.14% a year? Hahahaha! No wonder you got such bad grades in math! You are as stupid as I am! Hahahaha!
And if we were actually getting richer on this 2.14% a year, maybe things could work out. But we are not getting richer. Marc Faber, editor of The Gloom, Boom and Doom Report, writes, "In 1975, total domestic non-financial debts amounted to $2.26 trillion, and for the year total non-financial debt grew by $192.7 billion. In 2004, total non-financial debt reached $23 trillion, and annual non-financial borrowings are running at an annual rate of around $1.8 trillion." So non-financial debt increased by 1000% in 30 years? Wow! What does that work out as? It comes to a compounding of debt at a rate of 8% per year! As if that was not bad enough, he goes on to note that "Household total debt as a percentage of personal income has risen from 60% in 1975 to 120% at present." He is too polite to mention that this is a new record in the history of mankind, not just in America, but I am not so genteel: It's a new freaking record in mindless, stupid irresponsibility.
And it just keeps getting worse and worse, as he notes that nowadays "Total debts (including financial borrowings) have increased from 120% of GDP to more than 300% of GDP."
Seeing that I am down on the floor, breathless, helpless, a hollow shell of a man staggered to insensibility by the level of debt, Mr. Faber is turning to leave when he stops, turns, and notes that "the outgoing chief economic advisor to the President, Greg Mankiw (also a Harvard professor)," is on record as saying that " 'The United States is growing much faster than the rest of the world...Our demand for their goods has been growing more rapidly than their demand for ours.' "
Now, to show you the difference between the classy Mr. Faber and the childish, mentally ill Mogambo, when I heard him say that, I jumped on the table, grabbed my crotch and shouted "What a moron! I got your growing demand right here, Mankiw, you stupid bastard!" Mr. Faber, smooth and sophisticated as ever, says only that it is, "really bizarre (to put it politely)".
- On Free Market New Network News, Jason Hommel's essay is entitled "I'm Insanely Bullish on Silver". I know why I am bullish on silver, but nobody ever want to know what I think about anything, but somehow everyone is giddy with excitement to know why Mr. Hommel is so similarly inclined. He cites what he calls "the two most bullish factors affecting silver. 1. The world has nearly run out of silver. 2. The nations of the world have printed up nearly unlimited amounts of unbacked paper money. Put together, these two factors have never occurred before in the history of mankind."
So how high can silver go? He writes "I'm saying I'm way more bullish on silver than saying it can go to $2100/oz. I believe the price of silver will far exceed that due to the exhausted supplies, and the unrelenting massive industrial demand." Wow! What a guy!
Also on the FMNN site was a letter by a guy named Jack Lambert who "just listened to the Keynes vs. Hayek debate and it left me rolling on the floor in laughter." I personally did not hear the debate, but can imagine how it went, and why he is convulsed with laughter at the juxtaposition of Hayek juxtaposed with that Keynesian idiocy. Then he says something that I often say, namely "I can't believe that such crap passes for economics in a major college."
There was also a comment from a guy named Mark Goodson, who has "come to realize over the years that education and intelligence are not so closely related as many people seem to believe. I've learned that one cannot necessarily expect a Ph.D. to be any wiser than Joe Sixpack. In fact, my personal observations have led me to believe that many formally educated individuals have assimilated information greater than their intellect has ability to properly integrate." Hahahaha! It's the Peter Principle in academia! In case you don't remember the Peter Principle, it stated that people rise in an organization up to the level where they are no longer competent, and thus they rise to their level of incompetence.
- Charleston Voice has some
words to live by as you decide what to do with your money these
days. "Lower, or plateaued rates, are to bailout the banks
and corporations, not you. By congress legislating last week
to make it more difficult for individuals to declare bankruptcy
should be a red flag to individuals that their wealth and savings
are up for grabs (confiscation).
**** The Mogambo Sez: I was
reading where some guy opined that Dorothy Parker's most memorable
line was "What fresh hell is this?" And as our dismal
economic future unfolds, every day will offer a fresh opportunity
to use that immortal line.