Johnny's in the basement
Mixing up the medicine
I'm on the pavement
Thinking about the government
The man in the trench coat
Badge out, laid off
Says he's got a bad cough
Wants to get it paid off
Look out kid
It's somethin' you did
Mixing up the medicine
I'm on the pavement
Thinking about the government
The man in the trench coat
Badge out, laid off
Says he's got a bad cough
Wants to get it paid off
Look out kid
It's somethin' you did
Watch a very young Bob Dylan here: Subterranean Homesick Blues
Crazy week, and yes, I've been "Thinking about the government."
Saw that Bob Dylan was performing in China this week for the very first time. He agreed to a neutered set list that didn't allow any of his more controversial songs like "The Times They Are a-Changin'" or "Blowin' In The Wind." Maybe its true that revolutions are for the young? I found this quote from a young Chinese concert goer telling. "His music is OK. But I don't speak English, so I can't understand what he's singing," Gao Mingwen said outside the stadium. "I hear he's very famous though." Don't worry Gao, even if you were fluent in English you probably wouldn't understand him.
OK, back on task. To shut down the government or not to shut down the government? What a crazy question! While this bizarre theater was playing out, the real action was in the currency and precious metals pits. Whenever the ineptitude of our elected officials is on public display the dollar swoons, and today was no different. Of course the dollar has been swooning for years, but as the following graph shows it has been especially weak since Bernanke started QE2 last August. The dollar may only be down 9% versus major currencies (consider the competition; the sick Euro, and hobbled Yen), but look at it versus some other (harder) assets. The S&P 500 is up 23%, Gold is up 21%, and Silver is up a stunning 124%. Even though Bernanke is adamant that currency debasement does not cause inflation, the facts beg to differ. "Look out kid, it's somethin' you did."
This week CNBC had a Master's Of The Market series. I found the following two interviews to be especially candid. Not sure Mr Steinhardt will get invited back after his attack on the CNBC oracle Mr Buffett.
This was also a very good read in the WSJ, Stephen Moore: We've Become a Nation of Takers, Not Makers - WSJ.com
More Americans work for the government than in manufacturing, farming, fishing, forestry, mining and utilities combined. If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.
Enjoy your weekend!
Be careful out there, and keep the lights on,
Chris Wiles, CFA
412-260-7917
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This article contains the current opinions of the author but not necessarily those of the Rockhaven Capital Management. The author’s opinions are subject to change without notice. This article is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.
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