If Ben Bernanke Were an NFL Head Coach

At the end of every NFL season the pink slips come quickly. I think it was Jerry Glanville who once said that NFL stands for "not for long". That is especially true if you are a head coach with modest results. In the NFL modest results could mean winning as often as losing. A simple .500 record. This past week the US Senate offered a verdict on Ben Bernake's tenure as Chairman of the Federal Reserve and in my opinion their decision was the equivalent of bringing back a coach with multiple 5-11 and 4-12 seasons in his resume.



Am I being too harsh on Helicopter Ben the bubble blower? The video above, courtesy of my friends at The Daily Bail demonstrates Bernanke's fecklessness. It might be unfair not to assign equal blame to Ben's mentor and partner in money printing, Alan Greenspan, but Greenspan is off on the big money speech circuit now. Why anyone would be interested in what Greenspan has to say is another matter.

Prior to his stint at the Fed, Ben's claim to fame was that as a Princeton professor he was viewed by many academics as one of THE experts on the Great Depression. Think about it. The world's largest economy is in the hands of a guy who has no practical business experience.He has read a lot of books though. It's like making self-proclaimed NFL draft expert Mel Kiper Jr. head coach of your favorite franchise.

Two issues surrounding the Bernanke confirmation still perplex me. Why is Obama and fellow Dems defending and pushing forward the appointment ? The Republicans have largely abandoned support for Bernanke, yet he and his predecessor Greenspan are and were Republican administration appointees. Why take the heat for the other guys poor pick?

Why do we have this fairy tale belief that the Fed can somehow manage a multi-trillion dollar economy. Wasn't one of the great fallacies of the Soviet system this idea that you could somehow centrally plan a national economy. It's so easy for us to see the error of the Soviet's on this, yet we insist on believing that we can somehow do similar central coordinating via the Fed.Is it any wonder we have witnessed multiple bubbles and an almost total destruction of dollar purchasing power over the almost 100 years of the Fed's existence.

If these Fed Chiefs are going to "get credit" for saving the system, they need to be held accountable for setting the stage for the system to need saving in the first place. Being accountable does not mean a contract extension. I am very disappointed with the US Senate and the current Administration on this one. If Bernanke were my head coach he'd be looking for a new job.

Martha Coakley.... Good Riddance

I see the President is making a trip tomorrow to campaign for the Democratic Senate candidate in Massachusetts, Martha Coakley. This Senate race epitomizes everything wrong with our current system. Watch what goes on the next couple days. It will be political March Madness. The wackos on the left ( the DailyKos crew) and the wackos on the right ( the Hannityites) will be out in full force making this political race a major event for all of us.

This election is being portrayed as a referendum on Obama's first year in office --- and maybe it is, but really, if Obama is unable to push his agenda through the Congress, sans a Democrat in MA. and with a mere 59 votes in the Senate something is wrong. (I'm saying this as a supporter of universal health care-- I am not opposed to the agenda in principle).

Maybe I'm naive as I do expect the people who ask for the honor of representing "the people" to be true leaders in every sense of the word. With that being said, a big thanks to the Daily Bail for posting the recent Dorothy Rabinowitz article in the Wall Street Journal revisiting the Amirault case and Martha Coakley's role in that case.

This case was one of several sensational cases in the mid 80's of wild child molestation charges that bordered on the absurd:

The accusations against the Amiraults might well rank as the most astounding ever to be credited in an American courtroom, but for the fact that roughly the same charges were brought by eager prosecutors chasing a similar headline—making cases all across the country in the 1980s. Those which the Amiraults' prosecutors brought had nevertheless, unforgettable features: so much testimony, so madly preposterous, and so solemnly put forth by the state. The testimony had been extracted from children, cajoled and led by tireless interrogators.
Gerald, it was alleged, had plunged a wide-blade butcher knife into the rectum of a 4-year-old boy, which he then had trouble removing. When a teacher in the school saw him in action with the knife, she asked him what he was doing, and then told him not to do it again, a child said. On this testimony, Gerald was convicted of a rape which had, miraculously, left no mark or other injury. Violet had tied a boy to a tree in front of the school one bright afternoon, in full view of everyone, and had assaulted him anally with a stick, and then with "a magic wand." She would be convicted of these charges.
Other than such testimony, the prosecutors had no shred of physical or other proof that could remotely pass as evidence of abuse. But they did have the power of their challenge to jurors: Convict the Amiraults to make sure the battle against child abuse went forward. Convict, so as not to reject the children who had bravely come forward with charges.

Martha Coakley had a chance to show true leadership when she became Middlesex County DA in '99. Obama agenda or not, I just don't see why she should be rewarded with a promotion given role in this pathetic mess. That is not to say that her opponent, Scott Brown is offering anything of substance either. It's part of the reason we are in the sad state we are in. Rabinowitz says it well as she concludes her piece:


What does this say about her candidacy? (Ms. Coakley declined to be interviewed.) If the current attorney general of Massachusetts actually believes, as no serious citizen does, the preposterous charges that caused the Amiraults to be thrown into prison—the butcher knife rape with no blood, the public tree-tying episode, the mutilated squirrel and the rest—that is powerful testimony to the mind and capacities of this aspirant to a Senate seat. It is little short of wonderful to hear now of Ms. Coakley's concern for the rights of terror suspects at Guantanamo—her urgent call for the protection of the right to the presumption of innocence.

Betting Against China

Very interesting article in the NYTimes today detailing crack short-seller Jim Chanos and his growing unease with the Chinese economy. At this point I don't have a particular take on this issue but I think it makes sense to be aware of the Chanos concern. He has gone against the crowd before in a big way (Enron) and profited big-time. At the same time Jimmy Rogers' comment is also worth noting:

I find it interesting that people who couldn't spell China 10 years ago are now experts on China,” said Jim Rogers, who co-founded the Quantum Fund with George Soros and now lives in Singapore. “China is not in a bubble.”
Colleagues acknowledge that Mr. Chanos began studying China’s economy in earnest only last summer and sent out e-mail messages seeking expert opinion.

The bottom line is that we are still in very difficult economic waters. It wouldn't take much to tip us back into the financial danger zone. If the Chinese run into economic problems in the near term all bets are off for the rest of us. The situation deserves monitoring.

Fish Where The Fish Are

The maxim, " Fish where the fish are," is as relevant to markets and investing as it is for selling or fishing. Thanks to Jesse at his Amercain Cafe for the chart above. It's been popular in some forums to label the yellow metal's move over the past several years " a bubble". I don't know about that but what I do know is that gold is in a Bull Market.From my experience bull markets tend to have quite a lifespan. Think about the lastgreat equity bull market we experienced. It began in 1982 and had a run to 2000 ---- almost 18 years.

That's not to say that there aren't some hair-raising corrections in the interim but as Jesse Livermore was reported to say, " I made my money by sitting not by thinking ". ( In other words he sat with his positions and let his profits run rather than trading in and out --provided we are in a bull market of course).

The point here is that we are in the fourth or fifth inning of a nine inning gold bull and the major fireworks are still to come . Stay long, stay strong the numbers to come will be breath-taking.

A Christmas Reflection

Christmas Day has visited us again.It is interesting that Christmas, the day that commemorates the birth of Jesus Christ, has joined that select two or three Holidays in the course of the year ( Thanksgiving and New Years are two others that come to mind) where retail life comes to a virtual standstill ---except for the NBA and the ubiquitous Chines restaurant. Christmas is as secular a Holiday as we have in modern day America. This Holiday, embraced by almost all, is of recent vintage however.



Christmas wasn't institutionalized as a Church Feast until the mid 4th Century. Even then, the major Feast celebrated was the Feast of the Epiphany ---the Baptism of Jesus by John the Baptist--- commemorated on January 6. The celebration of Christmas was banned by the British Parliament in 1647 and even though the celebration was restored by Charles II in 1660, the Presbyterian Church of Scotland continued to discourage celebrating the Feast. This antipathy carried over to the British colonies in the New World. The celebration of Christmas was actually banned in Boston from 1659-1681. The venerable George Washington led his troops in an attack on the Hessian troops at the Battle of Trenton 1777. These historical tid-bits add to my amusement at some of the current arguments about whether we are taking Christ out of Christmas in our modern world.

One of the most common images of the Nativity is the manger scene, the "babe in swaddling clothes". While this imagery is accurate, I believe that too much of a focus on " the baby Jesus" almost softens the awesomeness of this Feast.

We Christians believe, that this Jesus, born in Bethlehem is the Son of God, the Word of God, through whom all of creation was made. How awesome is that!!! John, in his Gospel says it this way:

John.1
[1] In the beginning was the Word, and the Word was with God, and the Word was God.
[2] The same was in the beginning with God.
[3] All things were made by him; and without him was not any thing made that was made.
[4] In him was life; and the life was the light of men.


This same Jesus we so sentimentally think of as the "babe in the manger" was with God the Father before the Creation of the world. This Word of God spoke with Abraham, Isaac and Jacob in the Book of Genesis. Gave the Law to Moses and spoke with David as well as the Prophets. The mere thought of the Word of God taking on flesh and becoming like us is incomprehensible, ineffable, inconceivable. It's almost too much to take in . As presents our opened and greetings of the season are exchanged the "big picture" of the Feast is worth a quiet reflection.

Taxes--history says they are going up.

Wow! I came across the chart above on Jim Sinclair's site. It's hard to believe that we went from a 25% marginal tax rate in 1930 to 79% in 1940. That was all done smack in the face of the Great Depression. It sure looks like we could be looking at a repeat of history and from where I sit that would not be a good thing. Given the poor state of the American household balance sheet, a tax increase like the one above would decimate what is left of our consumer economy. It's a conundrum our leaders wish they could avoid if at all possible. Kick the can down the road, that is the politicians way.

Take a look at the tax rate for the war years 1941-45 --- a jump up to 94%. Can you imagine a 94% tax rate? That is the definition of shared sacrifice. While I am not a fan of higher tax rates, I believe that if we as a country decide that war is necessary we should also be prepared to pay for it. 90% + tax rates might put a damper on some of the banging war drums.

Paper Money

I stumbled across an interesting article while browsing on Jim Sinclair's site last night. The article is entitled :

GOLD IS NOT GOING UP-- PAPER MONEY IS GOING DOWN by Egon von Greyerz

Here's a snippet that really needs to be read more than once:

The chart above shows how the purchasing power of the dollar has declined in real money – gold – in the last 10 years. And if we take the period from 1909 to 2009 it shows the total destruction of paper money. In 1909, $1,000
bought 50 ounces of gold. Today it buys 0.83 ounces. This means that in the last 100 years the dollar has declined by 98.3% against gold. So in real money terms
the dollar is now only worth 1.7% of what it was worth a
century ago. Thus, the US government (as well as most other governments) has totally destroyed the value of real money by issuing unlimited amounts of paper money and in the next
few years they will also kill off the remaining 1.7% of value to make the paper dollar reach its intrinsic value of zero.

This silent devaluation of our wealth is a brutal , almost hidden tax that the masses continue to be oblivious to.