Monday, August 15, 2011

Dog Days of Summer

The dog days of summer are upon us: those last few days before school begins, hot and humid days with no worries and some down time before the busy days of September.

As usual baseball has sorted out by this time, the Red Sox and Yankees are the two best teams. Tony Villar is nowhere to be seen (what else is new). ESPN is constantly showing Little League baseball, why? The best shows are now on television: Breaking Bad, True Blood, Curb Your Enthusiasm and soon Boardwalk Empire and Mad Men.

A few observations as we head into these dog days of summer:

WHAT'S REALLY HAPPENING - Don't believe anyone who tells you this is a replay of 2008. It's not. Or at least it shouldn't be. European sovereign debt problems are significant but unlike the huge credit and real-estate price bubble that burst in the U.S. in 2008 and infected the balance sheets of nearly every bank on earth and crushed consumers leading to a deep, prolonged recession. And the wild market swings of the last week have very little to do with the S&P downgrade, no matter how many lazy news stories keep making the erroneous connection.

The S&P report was a very negative headline but it is no longer having any real impact on a market that is trying to figure out how far the European crisis is going to spread, how much banks are exposed to potential sovereign losses and how slow global growth will be the rest of this year and next. If anyone was worried about U.S. credit-worthiness the 10-year Treasury would not be yielding 2.20 percent, which adjusted for inflation is LESS THAN ZERO.

No one is worried about Uncle Sam's credit or the ability of the U.S. to deal with its long-term debt if it can get growth moving again. The U.S. could easily pass another big stimulus package without bothering the market at all. And at these rates (which amount to FREE MONEY) it would be a huge bargain (not that there is any chance it will happen).

During the process of finding a support level, the market is whipsawed by every rumor and data point and giant momentum swings feed on themselves, often with the help of pre-set computer algorithms and aggressive professional traders (AKA face-rippers). At some point (hopefully soon) a consensus will emerge on where equities should be priced and calm will return. Until then, if you are able, don't pay much attention to the daily freak outs. Because the only thing that could make 2011 look more like 2008 is a lot more irrational fear.

BUFFETT: TAX THE RICH - The Oracle of Omaha continues his media smorgasbord, an hour-long interview with Charlie Rose tonight and an op-ed today in the NYT asking Congress to stop coddling billionaires and hike up their taxes because everyone should sacrifice for the good of the country.

"I have worked with investors for 60 years and I have yet to see anyone - not even when capital gains rates were 39.9 percent in 1976-77 - shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what's happened since then: lower tax rates and far lower job creation."


Sen. Patty Murray (D-Wash.) (CO-CHAIR)
Sen. John Kerry (D-Mass.)
Sen. Max Baucus (D-Mont.)
Rep. Jeb Hensarling (R-Texas) (CO-CHAIR)
Rep. Dave Camp (R-Mich.)
Rep. Fred Upton (R-Mich.)
Sen. Jon Kyl (R-Ariz.)
Sen. Rob Portman (R-Ohio)
Sen. Pat Toomey (R-Pa.)
Rep. Jim Clyburn (D-S.C.)
Rep. Chris Van Hollen (D-Md.)
Rep. Xavier Becerra (D-Calif.)

DARTH VADER WATCH – Glad to see Darth Vader is back from vacation; RR missed his berating of employees and his management by intimidation. Rack this! If only his supervisors knew, or do they?

SILVER TONGUE DEVIL – Speaking of fine leaders, RR has noticed STD is back hustling his personal business while on COMPANY time. Only in America.

USA TODAY TOP 25 preseason college football coaches poll: 1. Oklahoma, 2. Alabama, 3. Oregon, 4. LSU, 5. Florida State, 6. Stanford, 7. Boise State, 8. Oklahoma State, 9. Texas A&M, 10. Wisconsin, 11. Nebraska, 12. South Carolina, 13. Virginia Tech, 14. Arkansas, 15. TCU, 16. Ohio State (what!), 17. Michigan State, 18. Notre Dame (not), 19. Auburn, 20. Mississippi State, 21. Missouri, 22. Georgia, 23. Florida, 24. Texas, 25. Penn State.

DODGER BASEBALL – Have you been to a Dodger game lately? If you don’t have a tattoo or a Raider T-Shirt they won’t let you in the ball park.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Robert De Niro (68), Magic Johnson (52), Mary Matalin (58), Ron Paul (76), Robert Plant (68), Robert Redford (75), Al Roker (57).


I am a man over forty and re-entering the dating scene, any advice?

--Looking for Ms. Goodbar


You may be older and wiser, and really know who you are and what you want, but you have no idea what it’s like to date in the new millennium. Some tips: Hit the gym – gym, tanning and laundry – all ways to improve your appearance and impress the ladies. Skip the bar scene – it is okay to go to bars with friends but do not do it to meet potential dates. Network – just like you would spread the word if you’re unemployed and looking for friends to hook you up with a potential job, tell everyone you’re interested in dating again. But do not use LinkedIn; nobody knows how to work it, or how it is supposed to be spelled, a waste of time. Good luck and one last thing if you have bad teeth, forget all I have said, you are doomed!

--Rink Rats

CONGRATULATIONS – Though details are sketchy, nephew GB has completed Officer Candidate School this past weekend. He now heads back for his final year at George Washington and then the Marines await.


sirocco \suh-ROK-oh\, noun:

1. Any hot, oppressive wind, especially one in the warm sector of a cyclone.
2. A hot, dry, dustladen wind blowing from northern Africa and affecting parts of southern Europe.
3. A warm, sultry south or southeast wind accompanied by rain.

“Plattsburgh New York, with its cutting tramontana and sultry sirocco days, we spent in the eternal city, taking rooms of an old woman who had a flat with stone floors and straw chairs in the via SUNY Plattsburgh.”

perderse, reflexive verb

to get lost; to be lost

“TenĂ­a miedo de perderse.”
She was afraid of getting lost.

Next week, more college football picks and the Jack Ass of the Month.

Until next Monday, Adios.

Claremont, CA
August 15, 2011


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