Las Vegas is a city built on the dream of getting something for nothing. But not only the tourists seek Lady Luck.
Casinos, small businesses and governments have all planned and expanded, counting on the dream of easy money — namely, more money and expanded credit for everyone, courtesy of the Federal Reserve.
Despite this being a nation of people who don’t read, everyone seems to be in the book-selling business. My local grocery store is now peddling the printed word beyond daily newspapers and a certain financial weekly that I’m addicted to. Admittedly, I’m drawn to books, like women are to shoes and pocketbooks. I don’t need any more, am running out of places to put them, and will likely never live long enough to read them all.
The dealing has started at this year’s World Series of Poker (WSOP) in Las Vegas. It seems America has gone poker crazy. The game is now televised and shown at all hours of the day and night, watched by millions all over the world who no doubt fanaticize about playing at the final table of the WSOP and winning it all. And, why shouldn’t they? Amateurs have dominated the tournament the past few years, making instant stars and changing the lives of guys who entered the tournament as patent attorneys or accountants, and leaving with millions of dollars and new careers.
With prices at the pump in the $4-per-gallon range, people are starting to think twice about taking those unnecessary trips. And it’s likely to get worse. “As the lack of supply growth and price-insulated non-OECD demand suggest a future rebound in U.S. gross domestic product growth or a major oil supply disruption could lead to $150 — $200 a barrel oil prices,” the analysts at Goldman Sachs recently said.
Not that these considerations are new.
H.L. Mencken once described democracy as “simply a battle of charlatans for the votes of idiots.” Writing in 1937 for the Baltimore Evening Sun, Mencken theorized that by now “the incurable idiots may conceivably constitute an absolute majority of the population.” Alas, another election season is upon us to prove his prophetic point.
FreedomFest headliner Doug Casey told a crowd of investors recently that it’s “tough to give advice because we’re in the twilight zone.” That’s quite a statement given that Casey has made (and continues to make) a living giving people investment advice, especially in the junior mining and resource stock arena.
Like a lot of baby boomers I make my living sitting behind a desk. Unlike my father who stood and cut hair all day, or my grandfathers, one who was a farmer, the other a carpenter, my job in the deflating credit bubble business requires no physical exertion — just mental stress. So, the idea to do yoga seemed like a natural. After a few months of stretching and bending, I’d be posing like a sweaty Patrick Swayze in Road House, I thought.
“There will be more bank failures, but nothing compared with previous cycles, such as the savings-and-loans days,” Sheila Bair, chairwoman of the Federal Deposit Insurance Corp. (FDIC), said in an interview recently after $32 billion IndyMac was seized by Bair’s organization.
