…TB has often said that Americans have two major flaws: first, a lack of patience – we want it all now, hence the mushrooming credit which has now turned into a crisis of epic proportions (although Larry Kudlow is intent on saying it is merely a small piece of the economy); and secondly, an inability to focus on more than one event at a time - our concentration, thanks largely to the media, is on the event du jour, be it the stock market rally of the late ’90’s, y2k, 9/11, the Iraq War, hurricane Katrina, etc.
We are now being tested on this as our focus in on the credit crisis…actually not on the crisis per say but it’s impact on the stock market. Everyone has an opinion: the credit crisis is overblown/understated; financial stocks are a buy/short; the Fed knows/doesn’t know what it is doing, etc. Weaving in and out are snippets on the presidential race…the earliest this has happened in history, and what have you really learned that would allow you to make an informed decision?…a huge car bombing in Iraq that killed more than 41 people earlier this week…are just examples.
We are also intermittently getting tape bombs on the estate tax, AMT, wealth gap, CEO compensation, and more. Tempers flare and then subside. CNBC has had discussions on all of these this week including how much Goldman Sachs CEO Blankfein will earn and how he may not take the total that is allowed him for fear of being a poster child for obscene income like Henry Kravis has become. Instead, it appears that he will take at least as much as last year but that they are creating a sort of slush fund to take advantage of the broker stock weakness and pick up the rest of the best talent on Wall Street. Also they are going to not pay bonuses to the bottom 10% of producers…hoping they will leave, and open up a desk for someone capable of generating even more revenues…creative destruction? Just interesting.
Yesterday, the stock market was down for most of the session then bounced around the time of the 10 yr treasury note auction (details below), and got a surge about the time that Sen. George Mitchell started disclosing details of the steroids investigation…it was almost like during a Bernanke testimony. Certainly, it could have been coincidental but the fact that CNBC devoted about an hour to this is telling.
But TB would like to point out an area we should care about yet are ignoring. He says this as a Viet Nam vet (not one who was in hand to hand combat but served on a combatant ship that saw action), returned home to find few had any idea of what we had seen, nor did they care…it is happening again.
The above picture is of more than 3,900 crosses on a hill in Lafayette, California, across from the BART station and visible from the freeway, Hwy 24. TB drives past it at least once a week and has watched it grow from a few hundred. The picture only shows about 3/4 of the crosses. Now double that number and add some more and you have the total number…including suicides by returning soldiers who weren’t able to adjust, in many cases TB would say financially, let alone emotionally. This deserves our attention.
While TB is opposed to the handling of Iraq by this Administration (and would have been opposed to going there in the first place were it not for the ‘irrefutable’ proof submitted by Colin Powell to the UN), and especially the dictates of Paul Bremer who is the main reason we are having so much trouble there, he leaves it to you to decide what the best course of action is…it definitely isn’t black and white.
TB knows this is out of character for this commentary but feels that this is the best way to illustrate our compartmentalization of news…not looking at the long run but merely a series of short run events…just like corporate management has learned to do…and quite successfully…for them (although there is a huge surge in firings, resignations and retirements…guess it isn’t as much fun when you’re not making money).
Trader Bill thinks it is clear to anyone reading these missives that they are merely commentaries…as he sees it…and in no way reflect the views of anyone other than himself. Information is gathered from sources he has found reliable, but no guarantees of accuracy are implied. No fee…nothing to sell…merely observations of events in the marketplace offering a non-mainstream viewpoint…sometimes…usually? Hope you find it useful.
Copyright TBD Capital LLC December 14, 2007
