Why we are Mugwumps

Our analyses are based on one thing: the chart.

Our editorial observations and comments are based on a liberal education, taking into account the zen mondo about Zen Master Zuigan. Each morning Zuigan, upon waking shouted at himself, "Are you awake?" And answered himself, "Yes I am". "Then do not be deceived by any man at any time." Someday we hope to extend this philosophy to women also.

In the meantime we try to confine our ranting and raving to this page.

April 20 2003 Days of Shame and Roses, or Blame and Roses.

If Richard Nixon had not completely destroyed the entire paradigm of "shame" we would say that the past week was a three ring circus of shame, hubris, arrogance, chutzpah and in general screw you I got mine. Anyone who reads the news knows what has moved us to make this gentle and non-condemnatory observation. Sunday's Times with its bald faced recitation of the facts about CEO compensation and its droll and unbelievable story on American Airlines should make anyone think twice about being a capitalist. Well, maybe not. But it would certainly make anyone think twice about being a criminal (white collar) because crime certainly pays in the executive suites. American Airlines executives sucked in their unions to wage and other concessions to "avoid bankruptcy". What they forgot to tell the poor blue collar suckers was that they had secretly written themselves pension guarantees and chocolate rich bonus contracts. As if that weren't bad enough NYSE specialists were caught with their pants down around their ankles, front running, lying and stealing and cheating and so this is a surprise to you? Bond dealers buy tobacco munis at 70 and pass them (yeah, really) to their customers at 91. Who said that theft went out of style? Wake up America! Wake up American Investors! Demand a share of the spoils. Demand to be let in on the action.

Actually (in a tone of disgusted resignation) the only thing which will clean up this country and its pigs to the trough markets and politics is full and complete disclosure. But they will never pass that law. Never.

April 11 2003 Baghdad Falls. Metaphors Abound. Common human decency in the creation of superlatives falls.

April 4, 2003 Rightists and Reactionaries attack under fog of war

One day Rumsfeld and buddies are fighting a rear guard action at the Pentagon against a guerilla attack led by retired generals in mufti. Next day the troops are having breakfast in Baghdad. The rescue of a female soldier changes the mood of the market in a trice. But it's still the economy stupid. If you think that war is where it's at you're watching the shells and not the pea. In the fog of war the Shiite conservatives are out not only to revolutionize the Muslim world, but also the liberal world made by Roosevelt and Johnson

February 1, 2003 Never Trust a Presidential Candidate

It has become traditional in our lifetime for US Presidents to reliably do exactly the opposite in office of what they promise when running for office. Lyndon Johnson, re Vietnam. Richard Nixon, re Vietnam ("I have a secret plan." Also a bridge I'd like to sell.). Results: 50,000 dead, the devaluation of the dollar, the end of the gold standard. Ronald Reagan, the budget and fiscal responsibility. Vide: the tripling of the national debt. George Bush II deja voodoo economics.

Now it's Reagan redux. Cut government revenues, increase government spending. The last time this happened it had the salutary result of sparing us a second George Bush I administration (the president who didn't finish off Saddam) at the expense of a relatively mild recession, ended, by of all things, the fiscal responsibility of, surprise, Clinton and Rubin and Lawrence Summers, with kudos to Greenspan and the dotcom bubble. Strange as it might seem we prefer a fiscally responsible Democrat to a Republican who balloons the national debt by feckless cutting of taxes. In actuality a plague on both their houses.

Each week the projected budget deficit grows, like a cancer on the presidency--now $2B, next week who knows. The shadow knows. More. Now talk of $2T (trillion) for nation building in Iraq. Excuse us. Didn't W rant against nation building?

The damage Reagan did will be nothing against the long term damage of Bush's economic policies. It is entirely possible that the country is set up for long term stagnation or painful deflation as a result of the tulipomania of the gay '90s anyway. (See our Major Turning Points Letter, 2nd Edition)

But the Bush Administration's belligerent adventuring and profligate spending could make the next few years a period of economic pain.

War is nature's way of telling you you have too much treasure and too many males in your population. What Freud called the thanatos instinct. And, finally, it is very bad for economies.

HAIRY CHEST COVERED WITH MEDALS February 14 2003

Lest anyone think we are against a war with Iraq for being pacifists, let us thump our hairy chest and present our warrior credentials. We were raised with shotguns and rifles in the back window of the pickup. All the NRA medals for junior marksmen are in a box in the attic. With them is the US Army Sharpshooters Medal. They share space with the old man's Bronze Star, and brother Bob's Colonel's eagles from the USAF. No shrinking violets in this family. Before we got fat and slow we played wing for the Boston Rugby Football Club and took no greater pleasure than going out on a Saturday and giving (and drawing) blood. We think Saddam ought to be squashed like a bug. But here is what traders and investors have to think about. Under any terms this war is not good for the market. And if it goes badly it will be horrible for the market. Even if it goes well it will go badly. Picture the oil wells of Kuwait going up in smoke. Brendt Paris? Are the oil fields of Iraq burning? They will. This could be the Mother of all Götterdämmerungs. War is the equivalent of piling up large mountains of cash and burning them for fun. In "Why We are Mugwumps" we noted that the deficit was supposed to go to $200B. And predicted more. Are we great savants, or what? Present deficit $307B. AND THE COST OF THE WAR IS NOT EVEN INCLUDED IN THAT. This is all surreal, if you will excuse us. Besides the utilitarian economic problems posed by the war there is another enormous political problem for Americans who live under a Constitution of laws. This is not a monarchy. Since when did any King, much less King George the Minor, decide that the country should go to war? If Congress were not composed of poltroons, and gutless wonders it would insist on its right to declare or not declare war instead of abrogating its responsibilities. Is everyone asleep? Evidently. Well when you wake up it will be to Dow 2000.

Casualties of War March 21 2003

It is said that the first casualty of war is truth. True enough in general, but in this case not true enough. The first casualty here is our constitutional democracy. The pusillanimous surrender of war powers to a single person by the Congress guts our democracy. As it were, a gutting by the gutless. We are not against the aims of the war. But the ham handed way it has been handled by George II and his Junta in Washington should disturb every American with a brain. A crypto conservative is engaged in attacks on the world order which will have effects on our lives for generations to come. It is literally breathtaking. As for the war the best things being written or said about it are coming from Thomas Friedman in the New York Times. We have been admirers of Friedman (The Lexus and the Olive Tree) since reading From Jerusalem to Beirut some years ago. Read his columns. Read his books. His is the sanest voice on the issue. In short he sees the revolutionary (remember the French revolution--or should we say the "Freedom" Revolution? Lots of people lost their heads about that.) nature of George II's policies while agreeing with many of the aims--as we do. If we are all to live at peace the fangs of militant Islam must be drawn. It will come as news to George II that these fangs can only be drawn by revolutionizing the educational systems of these primitive peoples. Cut off the head of one Jihadist and reap a hundred new ones. But in line with the Rightist ethos of punishment not education the right wing clique in Washington will continue to deal with symptoms, and not the disease. The economic and market turmoil we will reap from these short sighted policies will not end in your lifetime. Even if you are very young.