Economy

Just read Matt Taibbi’s incendiary rant on Goldman Sachs, after hearing him on NPR yesterday. How wonderfully angry he is! And to hear him saying the same things I’ve been saying for months to years now, but coherently and with independent fact checking … neat!

The article is very much about how Goldman Sachs specializes in riding the leading edge of securities and trading fraud. They seem to have mastered the idea of both making the rules and exploiting them. Convincing the government to bail out AIG (so that AIG could pay off their debts to Goldman) and at the same time allowing Lehman Brothers (Sach’s big competitor) to default. Genius! While that’s all true, I really resonated with something he said on the radio:

When I was somewhat naive about these things, I would hear about big bonuses and profits for bankers and wall street types and assume that meant that, in general, the economy was doing well. That they were some sort of barometer for our national finances as a whole. The reality is this though: Any profits and bonuses shown by the finance houses are money removed from the useful economy. That money does not go to create jobs, to invest in businesses, or anywhere but the least useful place in any economy: Rich people’s pockets.

In the article, he also makes the important distinction that the banking assholes with whom I’ve dined over the years never seem to get: There are companies and people who produce things or provide services to other people or companies … and then there are the fucking parasites. Banks are parasites. Banks and finance houses do provide some valuable services – but they also pull money *out* of the system and they don’t directly *produce* anything. That’s fine and good as long as they make the system more effective as a whole. When the parasite nearly kills the host (as it seems to do every decade or so), it’s time for a purge.

A related point is that when the derivatives market exceeds the size of the *real things* market (oil futures as opposed to oil itself, for example) price fixing, bubbles, and a crash are the inevitable result.

After the endorphins wore off, I settled down into a bit of a funk. Here I am with my 10 years worth of retirement savings, my fresh mortgage, my recently paid off credit cards, and my decent earning potential for the coming couple of decades. I would like to be able to stop working at some point with a reasonable nest egg. I don’t want millions … but I want my house paid off and I want to not fear the idea that I might live well past 100 years old.

What’s a bright, enterprising guy to do when the sharks are busily feeding in the waters of finance?

Well first off, don’t swim with the sharks. Day trading and small time investing are for suckers. I treat that crap like going to vegas and playing blackjack. It’s possible to make a small profit by working very hard and never making mistakes. However, at the end of the day you’ll still have to look yourself in the mirror and realize that you could have spent the day creating something rather than trying to scam the world out of a few bucks. Also, the house always wins in the long run.

Secondly, buy into companies that pay dividends. Invest in companies that use their money to make things or to provide services, and demand dividends. Paper is worthless, Wall Street’s estimates of corporate value are worthless. We all thought we were rich because we owned shares of artificially inflated companies. You know what I want now? I want to do business with companies who will *pay me* for the privilege of holding my money. You know what they call that? It’s a savings account, a money market, or a certificate of deposit. It’s a bond. It’s also investing in power companies. God, I love power companies.

Thirdly, live well within my means. We’re on the way to this – and as of October 1 we’ll be rational again (right now the house and apartment are overlapping and it’s a little crazy).

Finally – to return to the first point: Do not swim with the sharks.

Cat

You wanna know how bad off the cat is? I just gave the cat a sponge bath (she hasn’t been able to clean herself very well for a while, and she smells pretty bad) … and she *liked* it. Purring and purring and offering one blood-matted paw after the other to be scrubbed.

Now that’s . . . → Read More: Cat

Fight Club

My brother’s wedding last weekend was absolutely beautiful, and I need to document it in another post. First, though, I want to set pen to paper about our late night adventure with the belligerent drunk.

. . . → Read More: Fight Club

Permalink

I had forgotten about one endearing aspect of home ownership: Since property transactions are matters of public record – there are advertising groups who scour those records with incredible efficiency in order to send out official looking letters offering products for your mortgage or house. I don’t mind the contractors who spend their marketing time . . . → Read More:

Update

I spent most of yesterday working on the house. We’ve started dividing the world into critical-path and non-critical activities. Critical-path is “anything that is actively keeping us from moving into the place.” Non-critical is everything else. We then proceed to laugh at ourselves because we can’t seem to bring ourselves to do anything on the . . . → Read More: Update

Most unclean

I was awakened most horribly this morning.

. . . → Read More: Most unclean

He always gets up

I got high praise at Judo today. A visiting judoka from our friendly neighbors to the north was working a particular throw. There was some discussion about whether said throw would work on someone taller than her – and it was suggested that she try it on me.

After a couple of tries (ow), she . . . → Read More: He always gets up

Woodpecker

So I’m coming back from lunch yesterday, having dropped off the check for the shiny new gutters on the shiny new house. I reach the path from the street to my door and I see this bird clinging to the underside of said gutters. I had just enough time to think, “huh, he’s hanging upside . . . → Read More: Woodpecker

Epic snit

Got my “Home CFO” hat on this morning, and I opened up a letter from redmeds employers. It was one page saying basically that they hadn’t received a response to their request for information about clinical privileges, and they were following up.

Then I got to the bottom, where they said:

If you do . . . → Read More: Epic snit

Worst picture of me, evar.

You are welcome to respond, so long as you post a similarly awful picture of yourself.