Love in the Time of Viagra

Bill meets some of his old buddies and the conversation turns to…women; American women, sex and Viagra…

"Cling to her. Cling to her."

– Johnny Cash

"I’ve been using Viagra," said an old friend at lunch the other day. "It really works."

"Well, that stuff from Europe, what’s it called, Syalis or something like that, works even better," said another, even older friend. "I’ve used them both. You won’t believe the difference."

We are traveling around the U.S., catching up with old friends. How has the country changed in the last 10 years, we ask ourselves? What’s new?

We are fond, of course, of noticing the madness of crowds; it is one of our favorite forms of entertainment. Crowds rush to buy stocks that are too expensive. They drive up house prices to levels that make no economic sense. And they toss their hats in the air, celebrating politicians whom a sensible man wouldn’t invite to dinner. Crowds race from one delusion to another, like passengers on a leaky barge; the thing is soon swamped by their own enthusiasms.

But individuals have their moments of madness too.

Hooking Up: New Habits, New Lovers, New Lives

"You remember [Bob]," began another friend over dinner. "The guy has completely lost it. He sold his business and divorced his wife. It was amazing. He also moved to New York and bought a sports car. I’m not kidding. He did it all. He has a girlfriend half his age. I’ve never met her…but people tell me she’s a gold-digger. Well, good luck to her. The way [Bob] is spending money, there won’t be much gold left to dig."

[Bob] is not the only one. Many of our old friends have found new habits, new lovers…and new lives.

"You think it’s just the same old story," our friend explained. "You know, a guy gets into middle age and then begins an affair with his secretary. Pretty soon, he dumps his wife. But that’s not really what’s happening at all. It’s the women who are dumping the men. And then the men have to figure something out. I think they’re desperate. It’s not that they want to go on a diet and start all over with a 30-something woman. They have to do it. They don’t have a choice.

"There’s something about American women. They just don’t want to put up with us anymore…did you know that most divorces over the age of 40 are initiated by the woman, not the husband? It’s true. I don’t know what it is.

"I was listening to an interview with Heidi Fleiss, you remember her…the Hollywood Madame who ran a prostitution service? Well, she said some things I thought were very interesting. She said that most of her clients were men who had been practically abandoned by their wives. Their wives just weren’t interested in them anymore. She said she thought she was providing a service, not just for the husbands, but for the wives too – who didn’t want anything to do with their husbands.

Hooking Up: Don’t Act Romantic

"I know. When I got divorced, I told myself I would never again get involved with an American woman. They’re just crazy. They’re never happy with you, no matter what you do. It is as if they didn’t like being women. It’s as if they think they’re supposed to be tough, businesslike and combative. You can’t act romantic around them; they take you for a fool.

"This is not at all true with foreign women. Not that I’ve had that much experience, but I know from my experience that women from Latin countries are much easier to get along with. They like being women. They like you to treat them like women. You don’t have to negotiate everything. And they don’t argue with you…they just know how to wrap you around their little fingers so they get what they want. Of course…so do you…

"But here in America, after a certain age, women just get tired of their husbands. They must think they can get something better but I don’t know where they think they are going to get it. The guy they’re likely to hook up with will be just the same – just as broken down and repulsive."

"Oh, by the way…"

We turned our heads to an attractive young woman who had joined us for dinner.

"You guys may not realize this, but ‘hooking up’ has a different meaning in my generation."

"What do you mean…?

"When kids – or people in their 20s – say ‘I hooked up with so-and-so,’ it means they had sex…as in ‘I met this great woman last night…and boom…kaa-ching…we hooked up.’"

"Sounds rather casual…"

Hooking Up: No Love, No Romance

"Well, that’s just it. It is casual," she continued. "People in their 20s are not interested in love…or romance for that matter. They just want to have a good time."

"I know all about that," replied our friend. "My son, who is only twelve years old, is sending text messages to his ‘girlfriends.’ You wouldn’t believe what they are saying to one another. It’s all casual sex…I don’t think they actually do anything. But they sure talk about it casually…and explicitly. I was shocked…and I’ve been around, you know."

"Well, yes…" the young woman went on. "Some kind of revolution is going on. Young men in their 20s no longer chase women. They expect women to chase them. They are completely unable to carry on a conversation…or to say anything remotely interesting. They just say…’hey, maybe we should hang out together…and maybe we could hook up later…’

"Never, ever, would a man in his 20s have the composure…or the confidence to actually say anything nice or even something simple such as ‘you look very attractive tonight.’ They just can’t get the words together. Everything comes out ‘maybe’…and it’s all tentative. They just don’t really know what they want. They wait for the woman to tell them…it’s pathetic. Unless they’re drunk. And then they come up and say something in your ear, like ‘you’re so hot.’ Honestly, I’m fed up with men my own age."

"You should consider older men," suggested our friend. "You know, mature men, who know what they want. Men in their 40s and 50s…"

"Well…hmmm…that’s an idea," she agreed, tilting her head to the left, her dark hair gently sweeping over her shoulder.

Kaa-ching.

Regards,

Bill Bonner
The Daily Reckoning
July 16, 2004

Tom Dyson, from the ‘Golden Balls’ building on London’s Southbank…

– "The credit environment is the best we have seen for years," bragged Chuck Prince, chief executive of Citigroup, as the world’s largest financial services company posted another record quarterly earnings yesterday.

– Earnings soared 24% above those of the same period last year, coming in at a handsome $5.34 billion for the quarter. Unfortunately, when you’re scrutinizing the accounts of the world’s biggest bank, things are never quite so straightforward.

– First off, there is the $4.95 billion one-off charge to cover the settlement with WorldCom investors, whose portfolios took a pummeling when Citigroup recommended they buy WorldCom shares in a piece of heavily biased research. "Frankly, [the charge] hurts a bit," said Prince in a conference call. WorldCom investors, as they look at their broker statements, might not share his sentiments…

– Next, we see that profits were further boosted by a $350 million release from the loan-loss reserve as corporate credit quality continued to improve. This bad debt reserve now finds itself under the ‘profit’ line on the income statement. $350 million is not a large sum when viewed in the context of Citigroup’s gigantic balance sheet, but the message of confidence is clear.

– The banking index has shown remarkable resilience to the global financial downturn. In fact, the Philadelphia Banking Index (BKX) is still only 7% off from the all-time high, hit in March 2004.

– This particular index has not been affected by the bear market of the last several years and here’s the reason: "We live in the midst of the largest financial bubble the world has ever known," says the Gloom, Doom and Boom Report. "The credit madness is difficult to comprehend."

– Readers will agree that the figures are simply staggering. "A broad measure of the U.S. money supply, M-3, rose by $500 billion in the front half of the 1990s, then accelerated by $2.5 trillion in the back half," continues Fred Sheehan, writing in the GD&B Report. "To keep the bubble aloft after the stock market debacle, the amount of money issued from 2000 to 2003 exceeded the entire amount of currency printed in the history of the United States, from George Washington’s inauguration to 1980."

– "Total credit market debt in the U.S. (government, corporate, individual) rose from $4.7 trillion in 1980 to $28.9 trillion by the third quarter of 2001, and hit $33.6 trillion two years later." Today, as was forcibly pointed out to readers on Monday by the Mogambo Guru, total credit market debt stands at $34.625 trillion.

– But despite numbers large enough to give even the most accomplished maths-boffin a headache, the credit circus rolls on. So far in 2004, companies receiving a credit-rating up-grade have outnumbered those receiving the down-grade, reports the FT, for the first time since 1998. "A decline in default rates and strengthening fundamentals have helped sustain investors appetite for risk," said Standard and Poor’s, the rating agency. Of this year’s 22 rising stars, 7 were banks.

– And in another first since 1998, Banc of America Securities calculates that intraday price volatility in the Treasury market hasn’t been this depressed at any time in the last six years. The last time traders were so complacent bonds were about to crash. On that occasion it was the Russians defaulting on their debt…what will it take to wake traders from their slumber this time, we wonder?

– The FT thinks they might have an answer; in an article entitled "leveraged investors make bond markets ripe for a fall," they say that the combination of low-volatility markets, the proliferation of hedge funds, low returns on equities and depressed credit yields may have forced bond market traders to crank up their leverage.

– Yesterday, 30-year Treasury yields closed the day at 5.22%, unchanged on the day. 10-year yields added 0.01 to 4.49%.

– Meanwhile, over on Wall Street, stocks were more volatile than a hotheaded Spaniard in a mid-life crisis. The Nasdaq opened the day higher but quickly reversed back into negative territory. Then, after lunch, the bulls reappeared, pushing the index as high as 1,926 before it all came crashing back down into the red, for a close of 1,913, and a loss of 2 points.

– Both the Dow and the S&P gave up around half a percentage point each in yesterday’s trade. The Dow closed the day at 10,163 while the S&P fell to 1,107, a 4-point loss.

——————————————————————————————————————

Bill Bonner, back in Baltimore…

*** Consumers are tapped out. Businesses are paying down debt. What happens next?

Almost every president wants to be a war president, except for one who has actually been a war president. War gives politicians an excuse to spend as much as they want…while vastly increasing their power.

And now…with corporations and consumers cutting back (they have too much debt)…government spending seems critical. Richard Russell explains:

"[That] leaves it up to the U.S. government to keep the economy rolling. And if the government is the savior, that means that the U.S. government, in order to stave off dangerous deflation and recession, will have to run deficits, big deficits, huge deficits, maybe deficits of up to a trillion dollars a year. Impossible, you say? Hey, we’re running budget deficits of half a trillion dollars now – and as recently as the year 2000 we were running budget surpluses.

"So what’s the government going to spend the money on? My thoughts immediately turn to the "Big D" – defense. After all, who can object to our defending our nation from the new enemy? Whatever it takes, baby, whatever it takes.

"The US is now fighting two wars, and daily we’re hearing that the nation is under siege with the implication that maybe World War III is about to start. Believe me, from now to election time we’re going to hear endless talk from this administration about terrorism, danger, the need for a bigger military, more ships, more planes, more bodies in the military. Get ready for code yellow, code red, danger signals, and increasingly, the need for a major build-up of the defense system. After the election, if the Bush team is still in, it would not surprise me to hear more about a draft. And to be honest, I don’t know if it will be any different if the Kerry team is triumphant.

"This then, is the way the government plans to hold off deflation and recession. It can all be expressed in four words – MORE SPENDING and BIGGER DEFICITS."