Pigs Get Slaughtered

“It’s the fat pig that feels the butcher’s knife.”

Old Chinese saying

“When I was a boy,” he recalled, handing me the slimy glop, “the kids always got to eat the brain. Tell Madame Bonner to cook it with a little olive oil and onions. It is delicious, probably the best part.”

By then it was late in the day. We had worked all afternoon, butchering one of the pigs – a large, white female. The grim work was done. Now, Mr. Deshais and Patrice, a farmer from the village, reminisced as Henry turned the crank on the meat grinder.

“A few years ago, all the farmers raised pigs. This time of year, you’d see hogs burning all over the place,” recalled Patrice.

He was talking about the traditional way the hair is burned off. But maybe I should back up and explain the entire process to you. Who knows, if the economy enters a depression…we may all be raising hogs in our backyards. You can save this little memoir and refer to it at slaughtering time. Or, become a vegetarian.

Mr. Deshais had begun by entering the pigsty and choosing one of the 4 pigs we’d been raising for the last 6 months. He chose one of the smaller pigs – saving the better specimens for breeding.

Fixing a rope around the pig’s leg, he let it out into the farmyard and tied the rope to a doorpost. Mr. Deshais looked unhappy. “I don’t like killing my animals,” he said.

“You don’t seem to mind killing the chickens,” Patrice teased him. “Besides, it’s worse for the pig.” “That’s different. Chickens don’t have any feelings,” Mr. Deshais replied. Then, he petted the hog gently, with his right hand. His left hand held a sledge hammer.

The pig seemed to know something was up. She would not be calmed. Instead, she squealed and fought against the rope.

My son Edward, 8, had come to help. He had been full of boyish eagerness when we set off for the farmyard. He entered the pigsty and wanted to help Mr. Deshais with the rope and got in the way. But now, he dropped back… almost hiding behind the tractor.

Mr. Deshais raised the hammer and brought it down solidly on the pig’s head. The animal squealed as though it were being killed. But it had not been knocked out. It took another blow…and then another…before the pig finally fell. By then, the pig’s squeals had alarmed everyone. Even the cows, grazing in the nearby field came over to the gate to see what was the matter.

Once on the ground, Mr. Deshais took a knife and forced it into the throat. The idea was to puncture the aorta of the heart. He cursed himself for having driven the knife in too high up the neck. But it found it’s mark anyway – blood, bright red blood, spurted out.

“Get the pan,” shouted Patrice. “Don’t waste the blood.” A skillet was held under the neck to collect the blood, used for making blood sausage.

But the hog was not dead. It revived, even as its blood gushed out. Some of the blood missed the pan, as the pig thrashed about on the ground. Patrice seemed to regret every drop.

Finally, the blood flow dropped off to a trickle and the pig stopped breathing. Where only a few seconds ago, the big animal howled and squirmed, now the life force had gone out of it. Edward approached cautiously. The killing was over. All of sudden, it was quiet. The cows stood silently looking at us as though we were murderers. The hogs, still in the pigsty, said not a word.

Your editor wondered how men could kill one another. Killing a hog is hard enough.

But that is the way of the world; pigs are raised up just so they can be brought down. Who are we to argue with the scheme of things? If not for the desire to kill it prematurely, the pig would never see the light of day. Pigs die sooner than they hope, that is all. But maybe we all do.

In many ways, the pig had a good life. She rooted around in a field while the weather was good. When temperatures dropped in November, we moved her to a cozy stall. She never went hungry. She never had to read the editorial pages, listen to the radio, or attend a political convention. Never once did she go to the dentist nor ever file an income tax return. She had a good life.

We then tied the rope around both of the pig’s back legs and hoisted it up with the tractor. The corpse was taken back near the house. There, it was laid on a pile of straw and covered up as though it was to be given a Viking’s funeral.

The straw was lit and soon blazed up. After a few minutes, the pig was turned over and more straw added. The idea was to burn off the hair and sear the skin.

“This is the old-fashioned method,” said Mr. Deshais. “They don’t do it this way in the slaughterhouses. They just dip the animal in scalding water to get the hair off. But this way is better, the skin has a better flavor.”

By this time, the pig looked like the victim of a four-alarm blaze in a Baltimore rowhouse, blackened by fire and smoke. Mr. Deshais pulled off the smoking hooves and then we washed the body with hot water and scrapped the skin with bits of old terracotta roofing tiles. The rough tiles did the work of coarse sandpaper.

The hind legs of the corpse were then lashed to a wooden ladder, with the animal’s underside facing us. Mr. Deshais sliced the belly open, carefully cutting through the fat to the intestines. The trick is to remove the animal’s innards without puncturing them. The first step is to cut out the lower end of the intestinal track – which is now at the top – and tie a string around it.

Then, working downward, the internal organs are freed from the intestinal cavity…until they finally fall out. “What are you doing?” asked Henry, arriving at the scene of the crime. “Can I watch?” Henry’s latest career goal is medicine. He believes he might make his fortune as a surgeon. Thus, he watched the butchering with nascent professionalism.

“Just throw them all away,” said Mr. Deshais of the animal’s plumbing. “In the old days, we would have used them. But they’re not worth fooling with.” Of course, the liver, heart, and tongue and some other pieces I didn’t recognize were saved.

After the insides were hollowed out, Mr. Deshais cut off the head and put it in a bucket. “We’ll use that for the sausage,” he explained. He had already bought some sheep’s intestines to be used to make them.

Then, he cut through the entire body from top to body – down the middle. The result was two sides – on which the cuts of meat were fairly obvious.

But inside the chest cavity was a thin layer of fat and meat.

“Oh…take this,” said the gardener turned butcher, “this is the best cut of meat on the entire animal. Eat it tonight.” He carefully sliced the fat off a thin piece of muscle, which we did eat at our evening meal. (He was right…it was delicious.)

Blood sausage is made by grinding the fatty meat from the pig’s head and neck, with onions and parsley…and then cooking it with the blood. Be sure to put a little vinegar in with the blood to prevent coagulation before the sausage is cooked. Once cooked, the “links” of sheep intestine are filled up with the “black sausage” mixture.

There are, of course, details to be mastered and recipes to exchange. Curing the hams, for example, is an art. In some places, men would sooner share their wives with other men than share their ham curing recipe. And what to do with the remains of the head…and the miscellaneous other parts that rarely appear on a menu in the Anglo-Saxon world?

I don’t know, dear reader.

But you have the general idea. If a serious breakdown in the division of labor occurs, you will be ready for it.

But most analysts expect a surge in capital spending by tech companies – along with consumer spending that never, never, never dies – to pull the U.S. economy out of recession. In fact, Bill Dudley, chief economist for Goldman Sachs, thinks the recovery is practically a done deal: “The economic news clearly indicates the economy is turning.”

It is turning – on that point, Mr. Dudley will get no argument. But where?

I quote my favorite economist, Dr. Kurt Richebacher, in rebuttal: “Pondering the possibility or probability of an impending U.S. economic recovery, our focal point is corporate balance sheets and profits. As we have repeatedly stressed, both are in unusually bad shape, probably their worst since the Depression. Corporate indebtedness has soared out of all proportion to the profit-earning, productive capital stock…

“Many considerations have led us to the conclusion that a V-shaped recovery of the U.S. economy is absolutely impossible as far as the eye can see. But the key consideration is the miserable profit performance and its negative effects on capital spending for a long time to come…”

Why would tech companies – or any companies – increase capital spending now? They owe more then they’ve ever owed. Capacity utilization is down to levels not seen in 20 years. And profits continue to drop. The closer you look, through the fog of accounting legerdemain, the fewer profits there are to see.

Right, Eric?

*****

Eric Fry in New York…

– The stock market reverted to its losing ways on Friday as IBM, the Teflon tech company, fell short of its revenue targets. The stock cratered almost 5%. And for the second straight week, stocks yielded ground, with the Dow Industrials falling 2.2% and the Nasdaq sliding 4.5%.

– But there’s no need to worry, because all of the most celebrated strategists on Wall Street have assured us that stocks will not fall for three years in a row.

– Just to be sporting, I will reiterate what I predicted on CNNfn two weeks ago: The stock market peak for 2002 will be made in January, “or February 1st at the very latest.” It’ll be fun to see which of us enjoys a heaping portion of humble pie next New Years. I’ll save my appetite…just in case.

– Meanwhile, the two sectors weighing most heavily on the stock market are technology and financials. These are the same two sectors, incidentally, that Abby Joseph Cohen predicts will lead the stock market this year.

– Goldman’s bullish seer is correct in at least one respect – tech stocks and financials will lead the market somewhere.

– Unfortunately for the stock market, and therefore for Ms. Cohen’s followers, the brightest lights in tech land – Intel, IBM and Microsoft – are warning that the outlook for their businesses is uncertain at best. “Business conditions remain difficult as we enter the new year,” said IBM Chief Executive, Louis Gerstner.

– And then there is Enron – the biggest little bankruptcy in Texas.

– The nefarious deeds that helped to make and break Enron are percolating to the surface like so much foul-smelling hydrogen sulfide. Will investors choose to keep their distance from the stench by avoiding stocks altogether? Who could blame them if they did?

– Investors like to believe that corporate managements are on their side, looking out for their interests. They also like to believe that brokerage firms are on their side, helping them to navigate through a treacherous and confusing equity market. Lastly, investors like to believe that, if all else fails, the ever-vigilant accounting firms will make sure that companies are playing fair.

– It’s more than a little disconcerting, therefore, for investors to discover that the very parties who were supposed to be safeguarding the common shareholder were busy carving out a piece of the pie for themselves.

– During the years that I spent managing money in foreign equity markets, people would often ask me, “Isn’t it risky investing in those corrupt foreign markets?” To which I would respond, “It’s probably safer than investing in our own corrupt markets, simply because the corruption in foreign markets is well known. By contrast, almost everyone in the States naively assumes that the American markets are squeaky clean.”

– Investors who are aware of certain risks behave more vigilantly than those who are ignorant. “Forewarned is better,” as Jim Grant likes to say.

– Neither Wall Street nor corporate America has ever been as honest and true as investors believed them to be…while stocks were going up every day. But now that thousands of investors have lost billions of dollars, the rose-colored glasses are coming off…

…and the lawsuits are flying. Last week, four hedge funds that lost more than $120 million on Enron bonds sued Salomon Smith Barney, Goldman Sachs and Bank of America Securities.

– Additionally, Crain’s reports, “Pension funds for city and state workers [of New York], plus several New York banks, have launched a furious battle to pull what they can from the collapse of America’s seventh-largest corporation…The case is likely to quickly expand far beyond Enron and Arthur Andersen. Other deep-pocketed targets, such as the Wall Street houses that underwrote Enron’s securities, will be quickly roped in…”

– The Wall Street banks and brokerage firms may not be guilty of any crime in the strict legal sense. But they are at least guilty of major conflicts of interest that cannot help but corrupt their advice to investors. The brokerage firms became a kind of conjoined twin with Enron. To the extent that any skeptical analysis harmed Enron, it harmed them as well.

– Therefore, who could expect a Wall Street analyst – even one who attends church regularly – to utter an unkind word about Enron?

– “The cast of characters involved in Enron’s off-balance-sheet activities is much bigger than previously thought,” writes Robert Hunter in a terrific story at SmartMoney.com. “Limited partners included Chase Capital, G.E. Capital, J.P. Morgan Capital, Merrill Lynch, Dresdner Bank, AON, Credit Suisse First Boston, Morgan Stanley and First Union Investors, an all-star list of Wall Street insiders. Given the porous walls separating equity research from investment-banking operations, the suggestion that analysts at these firms knew nothing about the [Enron] partnerships before they blew up simply isn’t credible…Enron’s off-balance- sheet activities weren’t the mystery they’ve been portrayed to be.

– “What’s striking is how long Enron was able to get away with these transgressions without someone blowing the whistle. People at Wall Street’s biggest firms had intimate knowledge of these dealings, yet no one said a word,” says Hunter. “Wall Street can keep a secret far better than anyone could have imagined. How many other secrets is it keeping?”

*****

Speaking of foreign markets, back in Paris…

*** “Last week,” writes my friend John Mauldin, “you wrote that the Fed failed to warn of a coming recession. I should point out that this is not entirely true if you knew where to look. In the Daily Reckoning and Fleet Street Letter of sometime late in 2000 or early 2001, I did a guest editorial which cited a little known 1996 Fed study which predicted a recession based on the yield curve which was 100% dead on. (I wrote the original for my column in the late summer of 2000.) The study on the yield curve and recessions is still batting 1000 in its accuracy. Your readers knew, at least, if not the general public.

“You can bet Greenspan and crew had read the report. The author was and is the chief economist for the NY Fed. I think it was part of the reason for the more aggressive rate cuts than in the past. They KNEW a recession was highly likely.”

How do you like that? America is not as free as Hong Kong…and no freer than Estonia. Who would have thought it possible? Hong Kong is controlled by China (one country, two systems)…and Estonia only emerged from behind the Iron Curtain 13 years ago.

“You should wait for a full moon,” said a short, gray-haired man from across the road. Everyone in the country seems to have an opinion about butchering hogs. Mr. Deshais and I were about to kill one Saturday morning.

We were not put off by the old man’s advice. “You have to respect tradition,” explained Mr. Deshais. “But that’s just superstition.”

More on slaughtering hogs…below…