Boom Bust Boom

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Boom Bust Boom

****

 

By now, anybody who can sit through an economics lesson knows how the 2008 financial meltdown happened.

Banks assumed that housing prices would continue to go up forever, so they lent money to new homeowners who couldn’t afford the loans. Then the banks sold the loans to other banks and to private investors. This insured that a drop in housing prices would affect every financial institution and take down the entire economy. Then housing prices dropped…

It’s easy to play Monday Morning Quarterback and blame who you want to blame for the meltdown. You can blame the naughty banks. You can blame the lax regulators. You can blame the materialists who wanted to live in McMansions that they couldn’t afford.

People on the Right can blame big bad government for forcing lenders to make loans in poor communities. People on the Left can blame big bad Reagan and/or Bush for trusting the private sector with so much power and money.

Monty Python’s Terry Jones has a completely different take.

Jones achieved the impossible. He made a documentary about economics that is apolitical, upbeat, and easy to follow. And full of singing puppets.

 

The film’s hero is 20th Century economist Hyman Minsky. (As a puppet), Minsky explains his ground-breaking theory about business cycles.

First, there is a painful panic. After a panic, people become cautious and responsible. They take fewer risks. They do not invest on margin or using credit. Governments pass and enforce sensible regulations.

This responsibility leads to stability. And this starts the downward cycle over again. Stability leads to optimism and rising prices. Rising prices leads to euphoria. In the euphoria of ever-rising prices, investors use credit again and ignore regulations. Finally, inflated prices suddenly drop and a painful panic ensues.

This explains the 2008 Mortgage Crisis. According to Terry Jones, it explains every financial crisis.

Jones’s solution isn’t Socialism. Or more regulation. It is acceptance.

Terry Jones doesn’t blame anyone for the 2008 meltdown. “Boom Bust Boom” claims that cycles of boom then bust aren’t flaws in the Capitalist system – they are flaws in our nature.

If there are villains in “Boom Bust Boom,” they aren’t the capitalists – they are the mainstream economists. Jones states that the study of economics rests on a fundamentally flawed theory: the notion that people in the open market are rational.

When it comes to money and trading, Terry Jones asserts, we are irrational to our very core and always will be.

Jones illustrates his theory of irrationality with an experiment using Rhesus Monkeys.

A colony of monkeys was given coins that could be exchanged with humans for food. Food dealer #1 showed a bowl containing one grape. When the monkey gave him a coin, the human gave the monkey two grapes. Food dealer #2 showed a bowl containing three grapes. When the monkey gave him a coin, the human gave the money two grapes.

If the monkeys made decisions based on rationality, they would shop with dealer #1 as often as dealer #2.

But monkeys, like us, are emotional idiots when it comes to money. The monkeys all wanted to buy from Food dealer #1 and avoided dealer #2 like the plague.

When it comes to investment decisions, we are all monkeys. When our investment goes up, we feel pride and joy and euphoria. When our investment goes down, we feel shame and disgust and panic. The smartest among us know that our feelings are irrational, but we feel them anyway.

“Boom Bust Boom” is the exact opposite of a muckraking documentary. It presents a serious problem that plagues humanity. But there is no blame and there are no solutions. Just monkeys and puppets.

Betting on Zero

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Betting on Zero

**1/2

“By the sweat of your brow you will eat your food until you return to the ground, since from it you were taken; for dust you are and to dust you will return.”

-Genesis 3:19

 

I am thankful for the wisdom of this bible verse.

Without it, life would be a lot harder and more complicated. There have been hundreds of Sunday nights during my adult life where I lost sleep. I was dreading the long, daunting work week ahead.

But no matter how much I’m dreading it, I always go to work on Monday. That’s because I don’t view it as a choice. Genesis makes it sparklingly clear: if I want to earn the right to live and eat, I must labor.

I will work until my boss gives me a gold watch or until I expire at my desk. Either way is cool. I never feel sorry for myself. I feel sorry for the unfortunate people who haven’t internalized Genesis 3:19.

Life will always be harder for the chumps who think that there is a realistic path to wealth that doesn’t involve a 9 to 5 job. There will always be a Scammer trying to lure them away from their money. It could be the lottery. It could be the casino. It could be Herbalife.

Herbalife, I learned from “Betting on Zero,” produces health products. The company sells shakes, pills, and stuff that supposedly helps you lose weight.

Documentarian Ted Braun doesn’t tell us whether he thinks the shakes actually make you healthier and thinner. It hardly matters. Herbalife doesn’t make money selling health products; Herbalife is a Pyramid Scheme.

“Betting on Zero” is a half hour too long, but it is totally convincing. Herbalife doesn’t market its shakes to consumers; it markets them to its independent distributors.

The heart and soul of Herbalife are its shameless salesmen who are able to convince dozens of patsies to invest their life savings into Herbalife products and convince other people to do the same. That top salesman gets a cash bonus and an Alpha Romeo. The middle distributors break even at best. All the dupes on the bottom of the Pyramid get are products they can’t sell and bills they can’t pay.

The hero of this story is Hedge Fund manager Bill Ackman (seriously). Ackman saw what Herbalife is doing to its workers and set out to destroy the company and make money in the process. In 2012, he shorted $1 billion in Herbalife stock. Shorting a stock means that you sell shares that you don’t have. When the stock drops as planned, you buy them back for less and make a profit.

The victims of this story are the undocumented immigrants who fell for the scam by the tens of thousands. Herbalife used Spanish-language advertisements to target illegals because they are less likely to go public with complaints about being ripped off.

I don’t feel quite as sorry for Herbalife salespeople as Ted Braun wants me to. If somebody says: “I have a job for you! Now give me some money,” you should know that it is a rip-off, not a job. If you give that guy your money, you are not a victim – you are a fool.

To be clear: I’m definitely not defending Herbalife. The company is awful and I hope that its stock price does go to zero. However, we don’t need government probes or Bill Ackman to make it happen.

Herbalife would shut its doors tomorrow if everyone just woke up and realized there are no shortcuts to success in this life. All you have to do is read Genesis 3:19, get up bright and early on Monday morning, and then go to your soul-sucking dead-end job like the rest of us.

 

Nobody Speak: Trials of the Free Press

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Nobody Speak: Trials of the Free Press

***

 

In 2012, the news gossip site Gawker posted part of a video that showed Hulk Hogan in bed with his best friend’s wife.

Hulk Hogan was so ticked off that he could have torn his shirt off in anger. So, what did he do about it?

He successfully sued Gawker and its publishers for $140 million that they definitely did not have. Hogan knocked Gawker out of business faster than he knocked out the Iron Sheik.

Brian Knappenberger – director of the passionate, thought-provoking, outrageously biased documentary “Nobody Speak” – considers the Hulk Hogan trial to be the beginning of the end of America’s free press.

Knappenberger argues that the verdict violated Gawker’s Constitutional Rights. That is pretty far-fetched. Again, Gawker shared a recording of an old tan dude who was cuckolding his pal. If you think that’s specifically covered by the First Amendment, then you have an interesting notion of the kinkiness level of our Founding Fathers.

Knappenberger argues that the annihilation of Gawker is a warning sign that power in America is shifting away from reporters and into the hands of billionaires.

Apparently, the brains and the money behind Hogan’s lawsuit was Silicon Valley tycoon Peter Thiel. The tech billionaire had a grudge against Gawker because the site outed him in 2007.

Using $10 million to hire a team of A-list lawyers, the billionaire used the legal system to destroy his enemies. This sets an ugly precedent.

 

And if you can’t beat ‘em, buy ‘em. “Nobody Speak” also explores another way that billionaires can threaten the free press.

Sheldon Adelson is a casino tycoon and influential Republican donor. Apparently, he didn’t care for the way the Las Vegas Review-Journal was portraying him. So he bought the paper, made obnoxious rules about how much the staff columnists could write about him, and solved his problem.

I am not going to defend Sheldon Adelson; that is some childish Citizen Kane-esque nonsense. However, I don’t see how it spells the end of the free press. Mostly, it emphasizes how painfully anti-Republican this movie is.

Knappenberger spends a half hour on Adelson but no more than 10 seconds on Jeff Bezos’s purchase of the Washington Post.

If there is a man who has the motivation and the wherewithal to fundamentally alter truth and liberty in America, it is Amazon.com CEO and dictator Jeff Bezos.

Bezos is already the most powerful and influential person on planet earth. While most CEOs use their company’s profits to help investors get wealthy, Bezos continues to build a massive world-wide infrastructure that is slowly wiping out all competition.

Amazon.com is revolutionizing consumerism: making it easier, more mindless, more wasteful, more globalist, and more unaccountable.

Remember last year at this time when candidate Trump stated that Amazon corporation has “a huge anti-Trust problem”? Of course you don’t; the corporate media doesn’t even want us to debate that topic.

It is troubling that during the past few months, you and your family have spent more time discussing the substance-free Russia scandal than the urgent national need to break up Amazon.com. That is in large part because the most influential newspaper in Washington is now the propaganda arm of the Jeff Bezos empire.

In conclusion: Hulk Hogan is a crybaby who should be ashamed of himself. And we desperately need to break up Amazon.com.

Oh, and the death of the free press? That obviously isn’t happening. I proved it. I just published a column tearing down the world’s most powerful man and I’m not even going to get in trouble. The Press is fine.

Emmanuel Macron: Behind the Rise

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Emmanuel Macron: Behind the Rise

**

 

President Obama’s legacy has been hopelessly distorted by partisanship.

The American Right has spun Obama into something that he never was or tried to be: a Progressive.

Ask a Republican, and he will tell you that the President was an anti-American Socialist Peacenik.

Amusingly, the American Left has decided to defend this Funhouse Mirror version of Obama that never really existed. Ask a Democrat, and she will try to defend his foreign policy on humanitarian grounds and defend his health care plan on Progressive grounds.

The reality is that Barak Obama was as moderate as a leader can be. Every action existed to maintain continuity.

During the heart of the banking crisis, he let political donors at Citigroup choose his cabinet. Sorry, Obama fans, but you can read it for yourself in the leaked email from Citi to John Podesta on Oct 8, 2008. The Obama team was tightly allied with Wall Street from day one.

Obama’s foreign policy was a clever continuation of Bush’s War on Terror. Using drone strikes and covert actions, Obama kept his foot on the pedal of relentless Middle East murder and meddling while reducing the number of American body bags to a more tolerable level.

The Affordable Care Act is little more than a scheme to try to keep the current for-profit system going a few more years by extorting money from young, healthy people who need cash way more than health insurance.

In the end, Obama achieved minimal change. The only question is whether his campaign slogan “Change” was always intended as a cynical irony.

 

Now France has its own Barak Obama. His name is Emmanuel Macron. Macron is young, good-looking, smart, and charismatic. And he’s the living embodiment of the status quo.

“Behind the Rise” is a worshipful documentary that follows his successful candidacy for President. The documentary urges us to fall in love with the man. And urges us not to think too much about what he represents.

Emmanuel Macron is the insider’s insider. First he was an investment banker at Rothschild & Co. More recently, he was Deputy Secretary-General under President Francois Hollande.

Last year, Macron bolted from Hollande’s Party and formed his own Party: En Marche! (which means Onward!). See what he did there? Macron fights tooth and nail to defend the status quo, but he does it under the slick banner of Progressivism.

While Marine Le Pen relentlessly focused on France’s need to leave the EU and reclaim its borders, Macron felt no need to discuss issues at all. Throughout the movie, he mostly just smiles, tries to look dashing, and accuses his opponent of bigotry.

Apparently, Macron was right. He beat Ms. Le Pen in a landslide. Le Pen is the better person, but she was not a great candidate. She did a lousy job of reaching out to France’s growing minority population.

The winner of the France’s next election will be the one who communicates that the choice is not between Christianity and Islam; it’s between the Globalists and the people.

The problems plaguing France are unemployment, unchecked borders, and uncontrolled terrorism. The ultimate victims are poor, peaceful young French Muslims who just want to assimilate and work. They need change more than anyone.

The same bland agreeable nature that made Macron an appealing candidate will make him entirely incapable of leading France through the tough road ahead.

America has already been through this. Even though Barak Obama remained personally popular, his party and the American Establishment itself lost their credibility during his Presidency.

Change is no longer a cynical slogan. It’s a desperate need. The Establishment won with Obama and Macron. But we won’t be fooled anymore.
Après Macron, le déluge.

 

Get Me Roger Stone

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Get Me Roger Stone

****

 

“I am the most qualified. I have the most experience. I am the smartest and the most educated.”

-a foolish candidate for public office

 

I cringe every time I hear a politician say something like that. I loathe the guy saying it, but I still feel for him. That strategy never works.

At best, mentioning your brains and your experience makes you look like a boastful egghead.

At worst, people think you are telling the truth.

Being an experienced politician is not a qualification. It’s a huge strike against you.

It’s like saying: “hey, I’m an experienced thief. Let me guard your money.” Or “hey, I’m experienced at sending your sons to Asia to murder foreigners. Let me be your pastor!”

The American voter is willing to forgive almost anything – except the sin of being an intellectual insider. Roger Stone understands this better than anyone.

Roger Stone loves to show off the big tattoo of Richard Nixon that he has on his back. Stone’s worship of President Nixon makes total sense; Nixon was the master of anti-intellectual political success.

In terms of education, experience, and intellectual prowess, Richard Nixon was second to none. But he never would have told you that. He won a 49-State landslide victory in 1972 based on his personal appeal to the “Great Silent Majority” of working class Americans.

Conservative values only get a candidate so far. Republicans win elections by appealing to the anti-intellectual, anti-Washington, anti-establishment masses.

Roger Stone is the ultimate anti-insider insider. The colorful Netflix documentary “Get Me Roger Stone” presents him as the devious Forest Gump of Republican politics, conveniently popping up in the background at every major event.

The Watergate Hearings: 19-year old Roger Stone was there (he played a very minor dirty trick against Nixon’s GOP Primary competitor Pete McCloskey).

The Conservative triumph in 1980: Roger Stone was there (he was Reagan’s regional campaign director for the Northeast).

The 2000 Contested Election: Roger Stone was there (Stone claims that he organized a pro-Bush rally that intimidated Florida election workers from changing the results of the recount).

And if you don’t hate him enough already, Democrat readers, check this out: Roger Stone founded one of the original Super PACs in 1978 to run independently funded attack ads.

And he founded Black, Manafort, and Stone – a shamelessly greedy DC lobbying firm that represented the interests of anyone willing to pay them. Stone’s list of clients included Third World dictators like Ferdinand Marcos and Mobutu Sese Seko.

The neat thing about Roger Stone is that he doesn’t try to justify or explain away any of his villainy. If anything, he proudly over-emphasizes his evil achievements. It is better to be infamous, Stone proclaims, than not famous at all.

Though he works for Republicans, Roger Stone is far from a Conservative. He used to go to Swingers parties with his libertine wife. He enthusiastically supports Marijuana legalization.

He was pro-gay marriage long before any Republican (or any member of the Clinton family) supported it. There’s a surprising scene where Roger Stone proudly marches in a Pride Parade. He gets booed the entire time.

You can hate him all you want, but you must respect him. Roger Stone knows better than anyone how you win elections in the United States.

It definitely is not by claiming to be the smartest and the most experienced candidate. Just ask Roger Stone’s latest protégé: President Trump.

silence

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Silence

***1/2

 

The history of religion during the past 1000 years is the story of Islam and Christianity.

Muslim and Christian missionaries have tirelessly spread their faiths to all corners of the earth. Indonesia is 87% Muslim. There are more ethnic Indians who are Muslim than there are total people in North America. 30% of South Koreans are Christians. There are even 50 million Christians in Red China.

There is exactly one civilized country on the planet that has not been touched by the cross or the crescent: Japan.

From business suits to central banking to baseball, Japan has often been eager to adopt Western customs. But when it comes to Western Gods, Japan has always said “no” harder than a three year old listening to Amy Winehouse.

The question is why.

My theory is that the Japanese commitment to Family Unity is not consistent with religious conversion.

In America, if your brother has a religious conversion and is happy with his new faith, you are probably going to be happy for him. In Japan, if your brother has a personal religious conversion unrelated to the family, he is a traitor who has betrayed his father and his ancestors.

In Japan, the social necessity to get along with your group is more important than religion, faith, and truth.

Anyway, that’s just my theory as to why Japan never became Christian. Martin Scorsese has a different theory.

“Silence” tells the story of two Jesuit Priests – Rodrigues and Garupe (Andrew Garfield and Adam Driver) – who make a perilous journey to 17th Century Japan. They know full well that Christianity is punishable by death in Japan. But there is a rumor that their mentor Ferreira (Liam Neeson) has renounced the faith, and the young priests are driven by the need to save him.

In Japan, the Priests meet two types of people: Desperate Christian peasants who are brave but ignorant. And the Japanese authorities, who are smart, civilized, philosophical, and focused on their task of ridding their homeland of outside influences.

“Silence” is a long, harrowing movie. It’s a personal story of faith that is clearly meaningful to writer/director Scorsese. As a young man, Martin Scorsese almost became a Priest. And you can feel his love of Christ mixed with anguish and doubt as expressed through poor Rodrigues.

But though Scorsese’s heart is with the Christians, his mind is with the Japanese. When the Inquisitor engages Rodrigues, he tries to gently help the Priest understand how unwise it would be for him to let Westerners have too much influence over his subjects. Rodrigues sounds like a selfish simpleton, speaking only in theological dogmas and ignoring the Inquisitor’s concerns.

Perhaps my theory that Christianity is inconsistent with Japanese culture is nonsense. “Silence” makes a stronger argument about why Western religion never took hold in Japan.

In the end: the Japanese aren’t Christian because their leaders didn’t want them to be. And they had the organization and strength of will to stomp out Western influences in a way that no one else could.

The Wizard of Lies

 

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The Wizard of Lies

***1/2

 

I have discovered the most suspicious sentence in the English language:

“I am a Money Manager; give me your money.”

Money Managers are charlatans.

“I am an expert at investing,” he says. Of course he isn’t, though.

You already know for certain that the Money Manager isn’t actually great at investing. If he was, he would be wealthy already and wouldn’t need to be wasting his time conning you.

“The stock market is complicated,” he says. “You can’t do it yourself!” Of course you can, though.

I have a brief project for you: Go to www.cnbc.com and search for three companies. Any three…I’ll give you a few minutes…

Welcome back. Did you notice how those random companies have gone up during the past year? And during the past 5 years. And 10 years.

Stocks go up. People in the market make money. It’s pretty sweet. You don’t need a snake oil salesman in a suit to make your money grow. You can do it yourself.

 

In the end, a person who is thinking of giving her life savings to a Money Manager needs to ask herself one question: who does she trust more: herself? Or the Money Manager?

“The Wizard of Lies” answers that question emphatically.

 

The HBO film chronicles one gut-wrenching year in the life America’s most famous Money Manager: Bernie Madoff.

Thousands of people trusted Madoff (Robert DeNiro) with their life savings. These people thought they were wealthy and smart. It turns out they were only wealthy. Soon they were neither.

Bernie Madoff conned chumps into giving him $65 billion. They thought that Madoff was a master investor who had figured out how make double digit gains even during Bear Markets.

Madoff was a master of the Ponzi scheme. He made rich dupes eager to fork over their fortune. And instead of investing the money, he just kept it. He sent his clients statements showing how much profit Madoff had made them. But the financial statements were lies. They really had nothing.

Director Barry Levinson argues that Bernie Madoff had nothing, too. Sure, he had piles of other people’s money. But the cost of his wealth was a gigantic secret that he had to keep from his family.

Lying was Bernie Madoff’s greatest skill. By systemically lying to his wife and children to keep them from being accessories to his crimes, lying became Madoff’s greatest virtue. Ultimately, he succeeded.

It can be argued that Bernie Madoff was a good father. He provided for his family. His sons weren’t arrested after the Ponzi scheme was uncovered, even though they had been working in Madoff’s firm for decades.

Bernie Madoff saved his sons from prison. He couldn’t protect them from the Media, however. The horror of “The Wizard of Lies” isn’t the many super wealthy people who messed up and became less wealthy; it is the one American family that got torn apart by scandal.

De Niro’s Bernie Madoff says that it is no coincidence that he was arrested just as the 2008 financial meltdown hit. He claims that he is just a scapegoat for a broken system.

And he has a point. In the end, what did Madoff really accomplish? He took wealth from millionaires and billionaires and redistributed it – not unlike that other old guy named Bernie wants to do.

Meanwhile, what were Madoff’s clients expecting? They were looking for him to pick stocks in a rigged market where the investor always wins and the American worker always loses.

“The Wizard of Lies” dares to ask the question. Was Bernie Madoff a thieving sociopath? Or was he a Money Manager?

Judge-Ment Day

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It’s Almost Judge-ment Day

Last year at this time, The New York Yankees were not a good team. It looked like the Evil Empire had finally been conquered by Father Time and bad long-term contracts.
They were below .500. Even worse: they were boring, unlikable, and sad.
The gloom that had enveloped Yankee Universe was palpable. If the other team loaded the bases in the first inning, Yankees radio voice John Sterling would say: “We had better hope that Pineda doesn’t let two of those runs score. If he does, the Yankees will never be able to come back.”
And he was right. Mark Teixeira and Alex Rodriguez were washed up. Chase Headley and Aaron Hicks looked lost. And the whole team was lethargic and slow.
The Organization needed a change, there was no denying that. So what did the front office do? They signed some big money free agents….NO!!! Not this time. This time, the New York Yankees did the right thing. They got younger.
A-Rod was forced into retirement. Teixeira retired on his own. Carlos Beltran and Brian McCann got traded. It’s a whole new team. Fewer big names, fewer bloated contracts, and a lot more fun.
The Evil Empire has fallen. The Baby Bombers Era has begun.
The Yankees front office took its first step on the road to franchise sanity back in 2013. That year, the Red Sox unwisely signed Dustin Pedroia to an eight year contract extension. That contract looks okay now, but it won’t when the Sox have a broken down 37 year old infielder in 2021.
New York did not make the same mistake; they said good-bye to their aging franchise 2nd baseman – Robinson Cano.
To be fair, Cano is playing well for Seattle. But the Yankees’ 2nd baseman – Starlin Castro – is playing just as well. And Castro is 7 years younger and is playing for a fraction of the money on a shorter contract.
Starlin Castro is actually the high-paid elder statesmen on the team’s core of young stars. Power-hitting catcher Gary Sanchez is making the league minimum at age 24. The face of the franchise – Aaron Judge – just turned 25.
In contemporary MLB, scoring a big free agent signing is a sure way to make headlines. But drafting and trading for young talent is the way to win a championship.
During that same fateful winter of 2013, the Yankees took a chance on Aaron Judge.
Judge was chosen late in the first round. More than 20 other teams passed him over, and it’s easy to see why. Judge is 6’7’’ 280 pounds, and position players aren’t supposed to be that large. Athletes that size become tight ends, not outfielders.
As all baseball fans know by now, the Yankees made the right decision. Barring injury, Aaron Judge is going to be Rookie of the Year. And he’s on his way to becoming the league’s premier power hitter.
His size gives him a unique skill set. Pitchers are used to being able to fire high fastballs at hitters, creating a swing and miss, a foul back, or a pop up. Aaron Judge hits high fastballs out of the park.
Pitchers are used to being able to jam hitters with inside fastballs. Generally, the best a batter can do with an inside fastball is pull his hands in and shoot the ball to the opposite field – Jeter style. Aaron Judge is able to shoot the same inside fastballs to the opposite field – and over the fence in right-center.
It’s not that Judge has discovered a new style of hitting; it’s that Judge is a giant playing in ballparks that were built for mortal men. That’s why he leads in the league in home runs.
Don’t worry, Red Sox fans: Judge will probably slow down. History dictates that he can’t continue hitting at this torrid pace.
You had better hope he slows down. And that Sanchez, Castro, Hicks, and Didi Gregorius aren’t as great as they appear to be. If they are, The Yankees are a dynasty in the making.
It’s almost Judge-ment Day for the AL East.