Dow up again yesterday…but still below its summer highs.
What direction is it going? Who knows?
Is QE Forever fully priced into this market? Will stock prices rise with each additional increment? Or will investors realise that artificially low interest rates (and the support this gives Washington to fund its deficits) will not make their stockholdings more valuable?
We’ll wait to find out…safely out of US stocks, of course.
‘People think us cab drivers are stupid,‘ began our favourite cabbie-cum-philosopher, waiting for us at Jorge Newbery Airfield on our recent trip to Buenos Aires.
Loosely translated and greatly embellished, the soliloquy continued…
‘Part of the reason I drive a taxi is that it gives me time to think…
‘After the Malvinas War [aka the Falklands War], I got out of the army and started driving a cab. I like it because it’s not hard work. You get some disagreeable people. But usually, people are OK.
‘I have time. I listen to the news on the radio. I think. I calculated that since I started, I’ve been thinking for 30 years…50 weeks a year…about 45 hours a week. That’s 67,500 hours of thinking.
‘I tried to be disciplined about it too. I mean, there was no point in just thinking about nothing…or about just anything that popped into my head. I didn’t want to waste my time. If I were going to make progress, I had to think systematically…and stick with a subject long enough to get somewhere.
‘I thought about politics a lot…and about money…and why some people are rich and some people are poor…and how the government works. You know, what role it plays. And I thought about my own life…and why I did the things I did.
‘Some of it is simple. Generally, people who work hard, save their money and invest it carefully are the ones who get richer. The better educated…the smarter…the savvier people are, generally speaking, the wealthier they are. The good ones build high-rise apartment buildings…or run nice bars…or produce tons of soybeans.
‘Stands to reason that the more they can give, the more they can get. Of course, there are a lot of people who get a lot without giving very much. They’re just lucky. Or they’ve got some angle – like a brother-in-law in government, or something like that.
‘Forgetting about dumb luck, I think you can basically say that the smartest, hardest-working and shrewdest people always come out on top. Jobs. Money. Status. But some do it honestly and some do it dishonestly. In my book, getting a sweetheart contract from the government is dishonest, even if it is legal.
‘In the 1970s and 1980s I was out in the streets…urging the government to do this or not to do that. I saw the government as an extension of me…something I might influence…something that might express my own character and my own will.
‘I was a fool. I was really trying to get something I couldn’t get on my own…by using the power of the government to force other people to do something they didn’t want to do. Like taking back the Malvinas. Why should Argentina control them? Why send in troops? Why not just ask the islanders? Or why not just leave them alone?
‘And then, once we took the islands by force, why didn’t Britain just back off? Why not just let us do something pointless?
‘But government can’t leave bad enough alone. Even when it is peaceful. It takes your money. What does it give you back? Roads…schools…hospitals? In the most charitable interpretation of the actions of both Britain and Argentina in the Malvinas you could say we were fighting over who got to provide services to the islanders. But you don’t need someone pointing a gun at your head to have those things…
‘When you are young, you just get caught up in whatever is happening at the time – in your own life…and in the life of your community. You haven’t had time to think about anything too much. It’s taken me 67,500 hours of thinking to get where I am.
‘When you’re young, you have to act on instinct. Your country goes to war and you go to war too. You don’t want to be unpatriotic. But then, later, you look back on it and wonder what it was all about. If you survived, you have to wonder why you risked your life. What was in it for you? Would it have made you happier? Richer? Healthier?
‘They say that Charles Martel saved Western civilization from the Moors in 732 or 736, I forget which. But how can anyone know whether that was a good thing? Maybe we’d all be better off if the Moors had won the battle.
‘So, as far as we know, the people in the battle – on both sides – died for nothing. And that was certainly my experience in the Malvinas. Maybe I would have gotten a little temporary psychological happiness if we had recovered the islands. But it really wouldn’t have mattered one way or another to me who won.
‘So…why did we do things like that? It’s no mystery why the politicians and generals wanted to do it. They got more money and power. But why did we go along with it? There wasn’t anything in it for us…no money…no power. Glory, maybe. But what good is glory in a cause that makes no real sense? That’s what you could call ‘foolish’.
‘Why do we do it? Because we are genetically programmed to do these things. We have always had wars. But in the old days, these wars made sense. A man could get something out of it – you know, some loot or some p****.
‘But in the modern world, they don’t make sense anymore. Not for the ordinary soldier. Or for the guy who pays the bills. The only ones who get anything from it are the politicians, the government, the military and its suppliers. That seems obvious to me. But there are still a lot of wars going on.
‘And then I began to think about what other things work this way…where they don’t really make sense to the people who pay for them. But people go along with them because they have been programmed to go along with everything over thousands of years. It made sense in an evolutionary way. Those who didn’t have it in their genes to act a certain way – like going to war – died out.
‘And I began to see government as an archaic institution. Democracy too. When I drive you in the cab and you pay me for the service, that is a modern, civilised transaction. But if I vote for a law that prevents someone else from operating a cab, I am essentially acting like a barbarian.‘
for Markets and Money