This is a cut and paste of a post I wrote on late fall/early winter of 2007. My wife and I were recently having a discussion vis a vis housing that made me think of this post. Actually it made me think of another one, but I couldn't find that one. I found this one and read it, and, well, I'll post it again today.
I feel 100% exactly the same about everything in this post, only more so about the last sentence. Back then I was riding my bike, but I wasn't riding MY bike.
Bring Out Your Dead
Slight Warning – Towards the end of today’s post I kind of went into raving lunatic mode and as such today’s language isn’t exactly G-rated.
It’s like a funeral march. The Dow lost 237 points today. It now stands solidly under 13,000. From the comments I read, people are selling on all the bad news about housing, credit, economic indicators, etc and looking for good news from retail this holiday season. Well here’s the news, kids – there’s going to be no good news from this holiday season. The retail season is going to suck because people have no money and might actually finally be getting the clue that spending every dime that you’ll earn until you are 103, assuming you get every raise and bonus that you hope for until then, just isn’t that freaking cool. They are already calling this the “trade down” year – when people are trading down one tier of stores from where they shopped last year.
The promotion around Black Friday was unbelievably thick – even if you were under a rock you couldn’t miss it. A lot of stores opened up at ridiculous hours on Friday morning and had ludicrous sales during those early hours to entice people in. There were tons of reports of foreigners coming in to buy the big bargains that our enfeebled currency provides – the highest ever recorded number of single day visits from Canada to the US was Friday, and with all of these things going on, Black Friday was good but hardly great. The general consensus among retail analysts is that there will be thin to no growth in same store sales this season over last year. And to an economy and market that prizes growth above all else (even - and sometimes especially - profitability), this is death.
And here's the real whopper of the week. This housing credit thing? It's going to seem like a sunshiny day at the park once the credit card crisis hits. How do you think people have been bankrolling themselves as we strolled along into this lovely disaster?
You may wonder why I seem to cheer on all of this mayhem and decline in the market. Am I some sort of misanthrope, who gets off on the suffering of others? I don’t think so. I might be, but I don’t think so. Here are a few things which I definitely do hate:
1. Cheap disposable crap a la pretty much everything in Wal Mart
2. People who define themselves and others by their possessions
3. Selfishness, not only in the sense of greed but also in the sense of being unaware or uncaring about the effects one’s actions will have on the greater good.
4. Lack of self awareness, specifically the thought that “the rules don’t apply to me.”
5. Lack of accountability – “it was McDonald’s fault that I got fat.”
6. People always looking for the easy way out or in.
In many ways, I think that the average American has embodied most if not all of these tendencies in the last few years. For all the talk after 9-11 and how it would change us all for the better, it’s done nothing. We are shallower, greedier and less concerned about our fellow Americans and fellow man than we have ever been. At the same time, more people expect more to be done for them than ever before. Think about the people who bought houses that they should have known they couldn’t afford. Now there’s all this talk about helping keep them in that house. I’m not heartless, I don’t want to see people on the street, but come the hell on. They were the ones that drove the housing price dial to where it was going to pop. They were the ones who added 1,000 square feet to the size of the average American house in 15 years. They were the ones who needed granite countertops and stainless appliances. And now they can’t pay their heating bill because they got the shitty insulation and windows because who cares about shitty insulation and windows, and why are we letting the price of oil get so high, anyway?
Another aspect of America that I can’t stomach lately is Wall Street. I read today that traders were really looking for the Fed to do something. Like cut interest rates. Between meetings. Don’t they realize that our currency currently has about as much value as rubles did circa 1995? Are they high? The way we’ve handled our hegemony in the world’s economy is freaking staggering and amounts to little other than unintended financial terrorism. Of course, it is a suicide bomb that we’ve launched.
Want more? Executive pay. We reward CEO’s so highly, for such poor management, that we deserve what they give us. Of course they are smart enough to deliver exactly those returns which will yield the best financial outcomes for themselves. And then when we realize that they are either unable or unwilling to bring about the results that the board WANTED instead of the ones they ENCOURAGED, they get the fattest golden parachutes that anyone could ever have imagined. And all of these arguments that these guys drive the engine of the US economy and they create all of this value in the market – bull! Look where we are now. Can I send each one of them a bill for where we are now?
Finally, on to Chuck Schumer. I hate this guy. In defending the tax scheme that allows privat equity fund operators’ income to be taxed at the capital gains rate rather than according to income tax rates, this idiot said that a) these people put so much value into the American economy and b) if they were taxed as though their income was income, it would discourage them from doing what they do. My response – great, let them quit. I don’t know too many other places where they’re going to earn $36 million dollars a year, taxed or not. Also, please make them quit – dismantling companies and sending their jobs and tax revenue overseas isn’t exactly doing great stuff for America.
In short, we as a whole deserve everything we are about to get in the next two years. Maybe you don’t, I don’t think I do, but here it comes. The one thing you can be totally sure of is that the people who deserve it the most will be bitching about it the loudest.
On a slightly brighter topic, my bike is freaking awesome. I love riding it.