Pigs Get Slaughtered

U.S. government takes over the economy…

Not much news. Markets were closed yesterday. This morning, stocks in Asia are up. Ah…a new year…new hope… This year has got to be better than 2008. It couldn’t be worse, right?


But a friend called us yesterday and told us that our Daily Reckonings were too gloomy. So, we have made another New Year’s Resolution: we will always look on the bright side.

Let’s see. What’s the bright side of a worldwide financial meltdown? Of course…it’s the recovery…the rebound! After the darkest, coldest winter comes the sweetest spring.

So, maybe the Asians are right. Maybe this will be a good year. Maybe the stock first hours of trading in the Orient will give direction to the entire year.

We hope so. We have some positions we’d like to sell!

There…that’s looking at the bright side. When there’s a stock market crash…typically…you can expect a bounce. Stocks should recover 30% to 50% of their losses – before heading down again. Heck, if you get the timing right, you could even recover all your losses from ’08 (if you have any)…and end up ahead of the game.

If we were speculators, we’d take a long position in stocks soon. If we were speculators, we’d watch this position carefully…and reverse it when the rebound seems to have run its course – probably in April or May. And if we were speculators, we’d keep put in a leveraged bet on gold too. Somewhere between now and when this crisis finally ends, gold is bound to double.

Meanwhile, let’s look at another bright side. Let’s look at politics. Finally, thanks to the worldwide financial meltdown that the U.S. central bank helped bring about, the politician’s can take control of America’s most important industries. The dreams of central planners, meddlers, world-improvers, collectivists, Bolsheviks, corporatists and fascists are all being realized – right in the United States of America. All industries need money. And the U.S. Treasury department has it. And what it doesn’t have, the Fed will supply. This, and an open-ended bit of panic-induced legislation – TARP, gives the feds almost unlimited authority over the U.S. economy.

Bloomberg reports:

"The guidelines don’t bind the government, so the lack of specifics gives President-elect Barack Obama plenty of leeway to decide who succeeds and fails when he takes office in three weeks. The bailout was originally designed to buy assets from banks and has instead become a fund for Treasury to prop up lenders, insurers, carmakers, auto-finance companies and, now, any firm that may be important to those industries.

"Slippery Slope

"’The further you go, the slipperier the slope becomes, the more you open the door to anyone who says, "Look, my firm is in trouble, I need help too,"’ said Lyle Gramley, a former Fed governor and now a Washington-based senior economic adviser for Stanford Group Co. ‘We don’t want to go any further down that road than we absolutely have to.’

"The Treasury already has provided $6 billion in aid to GMAC, the financing arm of GM, and up to $17.4 billion in financing for GM and Chrysler, using funds from the $700 billion bank-rescue package.

"’Treasury will determine the form, terms and conditions of any investment made pursuant to this program on a case-by-case basis,’ the Treasury said in the new guidelines. ‘Treasury may consider, among other things, the importance of the institution to production by, or financing of, the American automotive industry.’

"The government will weigh ‘whether a major disruption of the institution’s operations would likely have a materially adverse effect on employment and thereby produce negative spillover effects on economic performance’ or on credit markets, the Treasury said."

Ha ha…get it? What major interruption of an industry’s operations wouldn’t have an adverse effect on employment?

The U.S. government can now determines who shall plant, who shall reap…and who shall bake. Americans will soon want bread, we predict. And then, the government will determine who shall eat! But that’s not exactly looking on the bright side, is it? What’s the bright side of a government takeover of the economy?

This morning…we don’t know. But give us the weekend to think about it.

"It’s the fat pig that feels the butcher’s knife."
– Old Chinese saying

Pigs have little brains. But then, what good would a bigger one do?

Mr. Deshais had sawed through the pigs’ skull. The brain cavity opened like the halves of a walnut, revealing an organ not much larger than a potato.

"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 sledgehammer.

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 its 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.

Your correspondent…

Bill Bonner
The Daily Reckoning
January 2, 2009

The Daily Reckoning