POITOU, France – Pessimism is a sin against God, said money manager Charles Gave.
It suggests ingratitude. And a lack of faith.
After all, this is God’s world…
What, not good enough for you?
That’s why we are always optimistic at the Diary. Things don’t always go the way we would like, but they always go the way they should.
Yes, the world may be headed to Hell in a handcart… but it’s for its own damned good!
$5 Trillion up in Smoke
It is cold and snowy this morning. But we are crossing to the sunny side of the street today.
Look how easy it is…
About $6 trillion has been lost in the world’s stock markets so far this year.
Well, boo hoo! It was only “on paper” anyway.
Meanwhile, the New York Fed’s Empire State Manufacturing Survey – which takes the pulse of New York’s manufacturing industry – just hit its lowest level since the last recession. (More on this below in today’s Market Insight.)
But what do factories make?
Stuff… and do we really need more stuff?
New York City is also reporting retrenchment in its luxury real estate market. Prices are down for the last eight months in a row.
To that, we say: It serves those rich SOBs on Wall Street right. They bought their digs with money they got from the Fed on super sweet terms. It’s a pleasure to see them take a loss.
You see what we mean?
No matter how dreary the weather, you can always use your portfolio statements to start a cozy fire.
With so much bad news coming from the economy, it is amazing we are not already in recession.
Perhaps we are. The Atlanta Fed now puts the growth rate in the fourth quarter of last year at just 0.6%. Given the squishiness of the numbers, the economy could have easily shrunk more since then.
And now – with even more bad news – the recession may well be deepening.
But hey, what’s wrong with recessions?
Aren’t they part of God’s plan too? Don’t they serve a purpose? Don’t they clear the gunk out of the economy?
Too much debt. Too many gambles that don’t make sense. Too many rich people who don’t deserve their money. It will be nice to get this trash out of the system. That’s what recessions are for.
Meanwhile, CNBC is telling viewers to “watch out” because important economic data in China comes out this week.
With $28 trillion in debt outstanding… it wouldn’t take much to cause a financial disaster in the “Red Ponzi.”
Well, que sera, sera. As composed and content as we are with disasters in the U.S., we are even more composed and content when they happen to other people.
Yes, we’re basking in the good news – no matter how awful it is.
So give us a high-five, dear reader, because a new report from charity Oxfam reveals that members of the “One Percent” now have more wealth than the other 99% combined.
And the 62 richest people on the planet have as much wealth as 3 billion of the poorest people.
You may be thinking, “Those rich bast**ds! How is that good news?”
But wait… Because you, too – dear reader – are most likely among “the rich.”
According to the Oxfam report all it takes is $68,000 in assets to get into the top 10%.
And if you want to be in the top 1%, all you need is $760,000 – which is about the present value of a typical house in the Washington suburbs… or a cheaper house combined with Social Security payments.
But the poor Oxfam people see the glass as half empty. Pessimists whine that the “rich have been getting richer.” The BBC reported:
Oxfam calls on governments to take action to reverse this trend.
It wants workers paid a living wage and the gap with executive rewards to be narrowed.
It calls for an end to the gender pay gap, compensation for unpaid care, and the promotion of equal land and inheritance rights for women.
And it wants governments to take action on lobbying, reducing the price of medicines, taxing wealth rather than consumption, and using progressive public spending to tackle inequality.
Rage, rage against the dying of the light…
Oxfam has no faith.
It cannot imagine that things can work themselves out. It has no idea what caused the concentration of wealth. It doesn’t even seem to care.
Had it looked more carefully, it would have seen that the rich got richer because they used the power of government to shove most of the chips to their side of the board.
Twice in the last 15 years, nature tried to put the rich in their place. The crash of 2000 reduced their Nasdaq wealth by almost 80%. Then the crisis of 2008-2009 cut their stock market holdings by more than half.
Each time, the fix was in. The gloomy meddlers got central bankers to rig the system on their behalf. The phony fiat money flowed. The wealth of the One Percent ballooned.
But don’t worry. Markets still work. Fate still functions. Bear markets and recession still happen.
Have faith. Be happy. The easy wealth earned by the rich since 2009… can vanish as easily as it came.
Originally posted at Bill Bonner’s Diary, right here.
P.S. Bill expects a violent monetary shock, in which the dollar — the physical, paper dollar — disappears. And he believes it will be foreshadowed by something even rarer and more unexpected — the disappearance of cash dollars.
Many Americans don’t see this coming because of what psychologists call “willful blindness.” But Bill has taken the extraordinary step of assembling the full shocking details in a special report. To get full details on what Bill calls the “Great American Credit Collapse”, click here right now.