Never mind

Never mind. The fiscal-financial-economic-credit emergency is not over. I guess lots of representatives heard from the constituents. They voted the deal down. Amazing!!! Unfortunately, the bailout is still necessary whether we like it or not. Even Warren Buffett said so. Not that he knows anything, but still, he's older than we are.

Horse sense

Okay, the credit emergency seems to be over. Lots of people never saw it as a real emergency since the stock market seemed to be doing fine inspite of the delay in securing the 700 billion dollar injection of funds but there you have it. Did Wall Street learn anything? Doubtful. Will the rest of the world keep blindly investing in the U.S. economy? Doubtful. We need an injection of plain old horse sense. That's what we need.

Told You So

Now comes Mr Sarkozy, President of France, at the U.N., saying in no uncertain terms that something must be done to stabilize the credit markets - meaning that the U.S. must act. He must have been speaking for a lot of other countries. I told you so. The pressure is coming from Europe and China. Then there was a call to expand the U. N.'s Security Council, meaning that the power of the U.S. in that body - if the suggestion is taken seriously - will be diluted. The new Council will probably include Germany, Spain, Japan, and Italy as permanent members. They saw an opening and they took it. They fear that a mismanaged U.S. economy will bring down the entire world financial system. In other developments, Warren Buffett bought a few shares ($5 billion) of Goldman Sachs stock. I was going to buy some myself but I ran out of money last week. Wall Street is not doing well, but it's not doing as badly as they would have us believe. Also, the FBI is investigating several banks over possible criminal activity.

Timid Reporter and Warren Buffett

TR: Good afternoon. Are you Warren Buffett?
WB: What would happen if I said “no?”
TR: I would politely remind you that you are.
WB: You wouldn’t doubt my sanity?
TR: No sir, I wouldn’t.
WB: Why do you call me “sir” if you’re older than I?
TR: You heard.
WB: Yes – the word’s getting around. Bill told me you said you were born in 1777.
TR: It’s true.
WB: Can you prove it?
TR: Most certainly I can.
WB: Where were you born?
TR: In Florence – July 7, 1777.
WB: You’re Italian?
TR: Not at all - just like you’re not actually English, I’m not Italian. I’m half Austrian and half Gypsy, or the other way around.
WB: You’re right. I have no ancestors in England, but I can trace my lineage all the way back to the Norsemen.
TR: My grandfather still tells me stories about the mighty Roman Empire.
WB: Is he still alive?
TR: Yes. I’m getting thirsty.
WB: I hope you brought change. I have a Coke vending machine in the den.
TR: Never mind.
WB: You say you can document everything about your old age and background?
TR: I’m timid, but I do not lie.
WB: Well, I’m somewhat at a loss. You may be telling me what you think is the truth, but you might also be insane - just like so many economists I know.
TR: Yes sir, but I didn’t come all the way to Omaha to talk about me.
WB: This magic potion you claim to have – it could make you the richest person on the planet.
TR: Richer than you?
WB: Yes.
TR: It’s not what you think.
WB: Let me have a shot at this secret, whatever it is. You can have 51% of the partnership without lifting a finger.
TR: This formula slows down your metabolism so that you age at only 3% the rate as everyone else.
WB: How has it been kept secret so long?
TR: It also induces you to keep your mouth shut.
WB: So how many people know about it?
TR: Seven.
WB: I don’t believe a word of this. You’re a shyster and a fraud.
TR: I’m not selling anything.
WB: You’re a con artist trying to set me up.
TR: I’m not a consultant and I don’t sell gold. You started this.
WB: I don’t even play Bridge with Jimmy Cayne because….
TR: He cheats?
WB: I didn’t say that.
TR: His butler told me.
WB: This just doesn’t square. If you’re so old, how come you’re not wealthy? How come you’re still timid?
TR: I have known people who have been born poor and died poor. I have known people who never learned to read or write in a lifetime. Time does not necessarily equal progress. It’s not given to every man to write a symphony or to invent a light bulb. Besides, why do you scold me if I have yet another two thousand years to make a little money? I might even get over my timidity. If you wait long enough….
WB: You’re not as timid as you appear.
TR: I have observed several generations over the span of more than two hundred years and have concluded that life is about eating and drinking and not much else.
WB: Then I have been fortunate. Not everything has gone smoothly, but I’ve learned to adjust to reverses that have come along from time to time. I’m a happy man.
TR: How is it that the richest man on earth can also be relatively modest?
WB: I have everything I need. I even have a private jet.
TR: Do you have any poor friends?
WB: I can’t say that I do. What good would that do me?
TR: You are a great philanthropist but you don’t personally know any of your beneficiaries?
WB: It’s best not to know. Bill gives me charts with numbers – that’s all I need to be aware of.
TR: Wouldn’t it be satisfying to actually see a person whose life changed because of your philanthropy? They wouldn’t need to know who you are.
WB: Do you know such a person?
TR: No.
WB: Could you find one for me?
TR: I’m still very thirsty.
WB: Here, I’ll lend you the seventy five cents for my vending machine.
TR: No, thanks.
WB: It’s time for my nap.
TR: …just one more question.
WB: Yes.
TR: Why did your wife Susan leave?
WB: What can I tell you? She wanted to sing.
TR: Thank you, sir.

The future

Well, now it looks like the President must explain himself to a group of world leaders in New York. The papers are saying that the U.S. economy and the rest of the world are inextricably linked and they are right. Now, as a result of this greedy financial fiasco, you can bet that the rest of the world will be very cautious about linking up with the U.S. economy from now on. The U.S. is now beholden to all those foreign governments and big foreign investors for buying so much of the debt guarantees (in the form of bonds). What would happen if the U.S. defaulted? It is not unthinkable. A few months ago, who would have predicted that the country would be left with no large investment banks to speak of? Next up for your tax money? The auto manufacturers. Keep this in mind, the government is not bailing out the economy - it's bailing out the big Wall Street firms which lost billions. Wall Street is holding the economy hostage by saying that it is no longer credit worthy and no bank will lend it a dime so that their enterprises can keep going. Who knew thay had zero liquidity? Of course, a seizing up of the most important credit markets will cause the economy to sputter in a very big way. What a way to do business. The economy will survive this turmoil but the rest of the world will now ponder this sad and risky scenario very seriously and begin to stay clear of the U.S.

Body piercing and tattoos

Tattoos are not my thing. Why would anybody want to put permanent paint on their body? I'm sure there must be a good reason - I just can't see one. Body paint as temporary adornment? Perhaps. I'm undecided about piercings or body jewelry. I think I would be scared to do one - too dangerous. What if it catches somewhere and tears your skin off? I don't even wear a watch. Maybe if someone gave me a Rolex, I might wear it to show off.

Timid Reporter interviews Jimmy Cayne

TR: Good afternoon. Are you Jimmy Cayne?
JC: Who are you?
TR: I’m the Timid Reporter. I have an appointment.
JC: Since when? Nobody told me anything about it. Are you with the media?
TR: Yes, sir, the Coffee Club Newsletter.
JC: What is that, a financial paper of some sort?
TR: No sir, it’s the company in-house newsletter for coffee drinkers and subscribers.
JC: That doesn’t tell me a thing little man. How many readers do you have?
TR: Eight.
JC: This must be some sort of joke. Get out - I have a very important bridge game to play in an hour.
TR: But, don’t you care what happens to your company?
JC: What company? I have all my money in European stocks.
TR: Bear Stearns.
JC: Oh, that company. I’m no longer in charge. Go talk to Alan.
TR: Alan who?
JC: Alan Schwartz. Don’t you know anything?
TR: Yes, of course. Mr. Schwartz. I tried talking to him yesterday but he sent me to you.
JC: I don’t have any time for this. I have nothing more to do with Stearns. Leave now or I’ll have to call security.
TR: I’m not leaving – the butler told me how you win at bridge.
JC: Ok, sit over there. I’ll give you ten minutes.
TR: I just need five. I don’t have enough questions for ten. I do want a couple of beers please.
JC: Sure, I’ll have James bring them. Push that red button on your chair to summon him.
TR: Ok.
JC: Now, back to your questions.
TR: My readers would like to know how it is that while the company is losing so much money, there’s always enough to pay all the directors huge salaries.
JC: That’s not hard to answer. Do you know anything about hedge funds?
TR: No.
JC: Good. How about short-term un-liquid periodic indexed debenture funds?
TR: No.
JC: Good. We call those STUPID funds, for short, by the way.
TR: I’m with you.
JC: Well, in the banking business, we’re constantly playing one set of funds against another. It’s sort of like betting the red and the black at the same time.
TR: I don’t understand.
JC: Don’t you ever gamble?
TR: No.
JC: No wonder. Let me try to explain. The reason we get paid so much money is that we are the only ones in the world who can handle the ultra complex processes of money management. I have barely scratched the surface and you are already at a loss.
TR: In more ways than one.
JC: Well, on top of that, there’s thousands of funds and hundreds of types of funds. On top of that, the game is on a global scale.
TR: So, it’s a lot of work?
JC: You have no idea, my friend. Do you ever invest?
TR: I have a savings account.
JC: You need more than that. If I had time, I would share a good tip with you.
TR: I’ll talk to the butler again if you don’t tell me. I want to make some money.
JC: Ok, ok, but you can’t print any of it.
TR: I won’t.
JC: Look up Mr. Octavian Shin in the Paris phone book. He is listed.
TR: Then what?
JC: Tell him client number 13 sent you. He will then give you the code for a Russian energy stock that pays 790%, guaranteed. You’ll be a millionaire in no time, especially the way oil has been going up lately.
TR: How much should I put in?
JC: Ten thousand to start.
TR: I only have two hundred.
JC: Well, I can’t help you there.
TR: You can lend me the difference.
JC: I don’t make personal loans. Talk to Alan - he’s the risk taker.
TR: You’re the one who cheats at bridge.
JC: Ok, ok. I’ll write you a check.
TR: The check won’t bounce?
JC: It’s not a Bear Stearns check.
TR: I am grateful to you, Mr. Cayne.
JC: Remember, you just have to know where to park your money.
TR: I think I learned a lot today.
JC: Please give my kind regards to your eight readers. Have a nice day, sir. James will show you out.
TR: Thank you.