THE OLD MAN AND THE SEA
I was gonna wait till next week to post- but there has been some important news stuff going on- and last night S&P actually downgraded our rating [from AAA to AA+]. So let’s do some today.
Of course last week we finally raised the debt ceiling- our debt will now hit around 17 trillion [wow] until the next raise. I found it interesting to see how the media try’s to tell the public what they think is best- and they actually lie quite a bit.
A few weeks back CNN started a new show with Fahreed Zakariah- I thought I would like it- Fahreed is somewhat of an intellectual and I have heard him in debates before. The only drawback I saw [in the past] was he seemed to take one position- and defend it vigorously- and then take the other side at another time- and sware that this time he was right.
Okay- during the debt ceiling debate- many on the left described the ‘Tea Party’ as nuts- terrorists, psycho’s- the whole deal. It did get a little ridiculous after a while. I saw Fahreed- you know- the smart guy- he tried to give an in intellectual argument to why the Tea Party was ‘subverting the constitution- and actually bringing down the Democracy’ what? Yes- he explained how our govt. has 3 branches- and when one party [Dems] hold 2 [Pres, Senate] that if a minority of the 3rd branch [Tea Part- minority in the house] ‘take hostage’ the country- then they have actually subverted the Republic.
He then went on to attack the whole Tea Party mantra- their idea of cuts without taxes- everything. He then explained that the entire world has compared us to Europe [now it gets bad] and that even Europe looks good compared to us- he said that the Europeans have actually ‘shown the world’ that they are very reasonable compared to the U.S. in their dealing responsibly with their debt crisis.
Now- the very next day- because of European fears [no matter what anyone says- they have not solved their debt problem- it has actually spread this week- Italy is on the edge right now] we began to see the market collapse [dow went to 11,300 from a high of 12,500]. There are many reasons that this happened- but one of the main ones is the fear that the European debt crisis might spread to the globe.
So- the night before Fahreed said the world compared us to Europe- and the reasons we are in trouble is because we did not act responsibly- like Europe.
Then when asked ‘overall- is it at least good that we made the deal and avoided default’ he said no- and then made the actual Tea Party case to defend his position. He said that the deal only cuts a few billion in the beginning years [which he has advocated before!] and then he said- the way congress spends- ‘there’s no guarantee that they will ever stick to the cuts’. This is the exact argument the Tea Party made- to the tee!
That’s why they fought for a constitutional amendment- which Fahreed does not want.
Okay- then MSNBC had on an addiction specialist [I kid you not] to analyze the mental health of the tea party. Martin Bashir asked this guy to explain the danger of the Tea Party. The shrink went on to explain that when addicts have unrealistic expectations [Tea Party- cuts and no taxes= want dugs to make me happy] that they will resort to any means to get what they want [Heroin addict- give me your money or I’ll shoot. Tea Party- do the cuts or well not vote for a debt increase] when addicts do not see the danger of their unrealistic expectations- then yes- you get Oslo, Norway. You must be kidding- they had a guy on the air- comparing the position of the right to the guy who killed 80 people in Norway- and he [like Fahreed] tried to make it sound respectable.
On the news last night- before the downgrade- the jobs numbers came out for July. Now- news addicts like myself watch these things closely. The ‘left’ wants real bad to have some good news for the average folk. If the numbers are bad [under 200,000 new jobs is bad] then that doesn’t help. But there was no way the numbers would be above 200 thousand- I mean no one predicted that. They were hoping that they would at least be around 100,000- and not like the last report- where they hoped for 100 thousand and got around 18,000.
So as I perused the talking heads [ABC, CBS, NBC] of course they talked about the ‘number’ of unemployment dropping to 9.1 from 9.2- the number that I was waiting to see was the actual jobs number- how many new jobs were created last month?
Instead- I saw a screen graphic [you know- Lemmings like graphics- they think if they show the public anything- well they will never know] and it showed 230,000 new jobs [what!] and the unemployment dropping to 9.1 [from 9.2].
I immediately new they were lying- they were gonna show what they wanted to show you- and if they can tell you their story- any way they can- they will.
So- the small print [under the 230,000 jobs number] was the total manufacturing jobs gained- get this- since 12-09. What? Why take one sector- and go back to Dec. of 2009- and then add it up and show on the screen ‘230,000’ new jobs. Well, that’s the only jobs number [230,000- for total jobs from July] that would fit with the picture ‘unemployment went down to 9.1’. [Note- the reason 130,000 new jobs does not lower the overall rate is because that does not even keep up with the population growth of the country- we get over 100,000 new people seeking jobs every month]
No other jobs number would work. So they simply lied- they gave you a picture- false- and thought ‘you know- the average folk- we tell them what we think they should hear’.
So how did the unemployment number drop to 9.1? There are various factors that make up the number- some months you have natural weather disasters [snow storms] and people simply don’t go looking for work- that skews the number. Other months- people have been out of work so long- they give up- that skews the number.
But if the total jobs were only 130,000- then you know for a fact- that the real number didn’t drop a decimal Point- cant happen.
So more than likely some people didn’t go job shopping last month- and that skewed the number. But- the media knew they needed you to see the headline ‘230,000 new jobs’ and ‘unemployment down- 9.2 to 9.1’ and by golly- they found a way to make that happen.
Now- I hate to say [well actually I don’t hate it] ‘I told you so’ but heck- I did! If you go back and read/check the last months posts- somewhere in there I said ‘people must be nuts to be in the stock market right now’ now- I gave the caveat ‘I’m not telling you to get out’ but I then went on and said ‘if you’re smart- get out’.
Every media financial guy that was on the air- bar none- said ‘to the average investor- don’t panic- stay in the market’. Yet- in the past few weeks- 98% of trades that were done by these professional fund managers- who manage 401 k’s- 98 % were trades fleeing the stocks and going into bonds. Why? The Dow was at 12,500 [too high in my view] and we were facing all types of bad news. The Greek debt crisis [now more than Greece] the entire U.S. housing market is still a mess- and will be for a long time. The jobs numbers are terrible- and every indicator tells me these next few years are not going to be good.
So- if the odds of the economy getting worse are very high- then why take the risk of staying in right on the verge of a possible collapse? I know we can’t ‘time the market’- but heck- all those fund managers thought you could. Look- there was [is] no chance that the market was gonna hit 13,000 in the next few weeks- and a very great chance that it would collapse- then get your money out for the danger week/month- and if the sky doesn’t fall- then you can get back in- there was no chance you were going to miss a bull market- none.
But all the guys on the news said ‘stay in- hang in there’ and at the same time they- and all the professional funds they managed- they all jumped ship- left the stocks and fled for safety- while telling you ‘you can’t time the market’ yes- we are the lemmings.
Okay- then last night- well the S&P downgraded us- for the first time ever. Why? Well besides all the stuff I just mentioned- they felt the debt deal did not go far enough- that we needed to at least cut 4 trillion in spending over 10 years- we did about half that.
The defenders of the president were out in numbers- blaming the S&P for bad math [yeah- they did make a mistake- but that doesn’t change the overall picture one iota] and the reality is- the global economy is in trouble. Now- when you downgrade an entity [state, city, nation- bank, etc.] that means that entity has to pay you more interest if you buy their debt [treasury bonds]. But the last few weeks we have seen all the professional money fleeing stocks- and yes- going into U.S. bonds. Look- these investors know the scoop- S&P didn’t reveal anything that we didn’t already know- so the fact is- yeah it’s bad that we got downgraded- but the other investment options are so bad- that at the end of the day- people are still buying U.S. debt.
In high school I had a teacher- Mr. Steinberg. Mr. Steinberg was not ‘cool’ as a matter of fact- he seemed a little nerdy. He was Jewish- and at times wore a Star of David necklace- it was big- it was like he was asking for the persecution.
I liked Mr. Steinberg- and respected him for not being ashamed of his faith. It was in his class [English] that I was introduced to the great classics. Grapes of Wrath, Old man and the sea- all the classics. After we covered a book- he would check the TV Guide and when the made for TV movie was on- he assigned us to watch it.
Both of the above books/movies became favorites of mine- till this day I’ll watch them when they pop up on the classic channel. I actually have the Grapes of Wrath book sitting right here.
But the movie- Old man and the Sea- enthralled me. The struggle of the old man- his fight with the great fish- his arm wrestling bouts with the younger guys- the whole mystique was my thing.
The author- Hemingway- was himself a ‘mans man’ he lived large- took in all the experiences of life- and embraced a philosophy of life called Nihilism. This world view was popularized by men like Sartre, Camus and Freud. It basically is atheistic and says ‘there is no real meaning to life- man is a ‘useless passion’- he exists, only for the purpose of experiencing life- when the pain exceeds the pleasure- that the responsible thing to do is check out’. Yes- this philosophy advocates suicide.
Sartre [John Paul Sartre] actually said that the only philosophical question left is suicide- that we need to ask ourselves- as a society- should we allow ourselves to check out- for the good of the whole- when the pain exceeds the pleasure.
Another great work of Hemingway is titled ‘the Sun also rises’. He took the title from the biblical book of Ecclesiastes- written by Solomon [you know- to everything there is a season]. Solomon also embraces a sort of nihilistic view in this book- though it is in the bible- it is a form of literature called ‘pessimistic wisdom literature’. Sort of the philosophy Hemingway embraced.
Hemingway spoke about this view all thru out his life- though he was a brilliant writer- he had no hope ‘in the world’ [Apostle Paul]. One night, after he went to bed with his wife- he woke up- went downstairs and rigged up his favorite hunting rifle- and blew his head off. His daughter followed him a few years later.
I don’t know what’s down the road for our world right now- there are many people feeling hopeless today because they have lost- yes once again- a big portion of their wealth. As Christians we can say ‘yes- life is hard- we struggle at times- but in the end our struggles are working out a higher purpose- we have meaning in life’ but the atheist/nihilist- to them there is no redemptive purpose to the struggle- when the pain exceeds the pleasure- well yes- they check out.
Over the next few weeks- wherever you are at- think for yourself. If all the professional investors take their money out of stocks- and at the same time they advise you different- then stop listening to them. If your mad at the right [or left] then don’t keep watching people who are coming up with diagnosis’ that say the country is being run by actual Oslo killers- that’s just not true- no matter how much you might hate their point of view.
And at the end of the day- we as believers- we do have hope in the world. Mr. Steinberg wore that star of David- proudly. And in a recent post [Last?] I spoke about the promise that God made to king David- that he would raise up one of his sons and this Son would rule on the throne for ever. Yes- today this promise has been fulfilled through Christ- who sits at the right hand of God.
I don’t know- maybe I’ll rent the Old man and the Sea later [I tried in the past but couldn’t find it] and I’ll see the struggle of the old man [played excellently by Spencer Tracy] but instead of embracing his creators view [that is his earthly creator- Hemingway] I’ll ‘give’ my sufferings up- as the Catholics say- I’ll offer them to the Lord. Hemingway took the cowards way out- at the end of the day- he wasn’t the man we thought he was- he copped out.