To Have and to Hold

Porter Stansberry got married last weekend. At the reception, a young lady asked Bill if he was gay…

"But man, proud man,
Drest in a little brief authority…
Plays such fantastic tricks before high heaven
As make the angels weep."

– Shakespeare’s Measure for Measure

"I do a lot of public speaking," said Porter after the wedding was over. "I’ve never choked up like that before."

"Well, maybe this was the first time you were saying something that mattered," we replied.

What Porter was saying was his wedding vows. The bride had entered the Methodist church on Mount Vernon Square only a few minutes early. The minister got right down to business.

"Do you, Porter, take Andrea…"

The question was simple enough. Porter knew the answer. But the words didn’t come easily. Some instinct told him these were words that mattered. They needed to be brought up carefully, one by one, like foundation blocks out of a rock quarry. It was no easy matter to put them in place. And then, once there in plain view, they were so enormous, so solid and durable…Porter could barely get them in place…

Later, after the wedding party…

"I thought you were gay," said a young woman…"You don’t look gay. But when you mentioned your ‘partner’ I thought you were talking about your…well…your ‘partner.’ That’s what gay guys call their lovers."

"I thought I told you I was married."

"Yes, you did, but I thought it was a gay marriage."

Defining Marriage: Watching the Parade

Here at The Daily Reckoning, we watch the parade. We gawk at man’s polished vanities, his pounding pretensions, his marching hypocrisies…his scams, conceits and silly -isms.

We enjoy the noisy goofiness of it all. Yes, we are "gay" in the sense we are lighthearted. But we are married too.
Even between a man and woman, a gay marriage is an oxymoron. Between two men or women, it is a lie. A man does not enter into a real marriage in a lighthearted way…but soberly, solemnly…as if he were going to his own funeral. We do not say that to be gloomy about it. Au contraire, marriage – like birth and death – is one of the few ceremonies in a man’s life that deserves a real celebration.

But a marriage between two men is another thing altogether.

"Lying rides upon debt’s back," said Ben Franklin.
Americans expect their houses and stocks to make them rich – without saving, without work, without sacrifice.

They believe the rest of the world will gladly support them in the style to which they’ve become accustomed – forever, and without ever having to pay back the money. That see no reason why they shouldn’t spend money their children haven’t even earned yet.

They think they are "good" – whatever they do. The poor lumps will show up at the gates of heaven with the blood of thousands of innocent Iraqis on their hands; they expect St. Peter to open the door.

And they think any two people – or more for all we know – can "marry" each other, even two people of the same sex! We read it in the paper. Of course, we have nothing against two fellows getting together. The two can be "partners"…they can be "friends"…they can be a lot of things; they can be united in many different ways – physical, mental, professional, financial, emotional. The only way they can’t be united is by marriage. To do so would be nothing but humbuggery.

You may call a sewer rat "lapin" and serve it up with carrots a l’orange. But it is still a disgusting rodent. Or you might dress up a village idiot in a Brooks Brothers suit and give him a Nobel Prize in physics. You still wouldn’t want to stand under a bridge he designed. But as the weight of debt builds up, the whole nation is crushed by sham. The meaning is squeezed out of words. Common institutions, such as marriage, money and war, are bent into grotesque new forms. Simple ideas are turned over and pressed into a new shape – the exact opposite of what they used to be. Instead of getting rich by saving, we are told to spend money in order to "help the economy." Instead of giving money to the poor…we borrow money from them. Instead of getting married and having children, same-sex couples get hitched to collect each other’s pension benefits from companies that will go bankrupt under the burden.

"Marriage is a sacred union," explained the presiding minister. It was created by God to make one flesh out of two and to preserve the human race. A "marriage" between two men turns the whole event into an exercise as shabby and corrupt as a joint session of Congress.

Defining Marriage: The Work of Nature

You can form a union of North and South, Dow & Jones, or Abbott and Costello. You may call it a "marriage." The two parties may love each other, and cheat on one another, too. They may argue. They may do unmentionable things in the privacy of their bedroom. The union of two men or women may be similar to a real marriage in every respect – except the essential one.

The French have created a special institution, called a PAC, to accommodate "gay" couples. Men can create any institution they want. But no man, no legislature, no bungling bunch of committeemen set things up so that a men and women get together. Nor does any law, regulation, decree or "-ism" keep the whole race going. That is the work of men and women…doing what comes naturally. It is the work of the gods, of Nature…of God himself.

"Do you take this woman to be your lawfully wedded wife? To have and to hold from this day forward…" the minister continued.

We are such sentimental fuddy-duddies. Sometimes we don’t know whether to fall upon our knees or upon our swords. For occasionally, generally at weddings and funerals, the hooey of man’s works suddenly lifts, like a bank of fog. For a brief moment, we stand in the light of day…awestruck. A tear forms in the corner of our eye; before us is something that no man jiggled or jived…something that no one twisted or spun…something that, for once, we can’t laugh at. Something that is no joke. Instead, it is so real and so serious, it takes our breath away.

"I do," said Porter.


Bill Bonner
sniff, sniff…
for The Daily Reckoning
September 17, 2004

Here’s something very interesting.

A recent report from Smith Barney includes two charts. The charts show the similarities between the United States and Japan over a 25-year period. As you will see, and as we highlighted in our book, the two markets seem to run in parallel – separated by a 10-year gap.

Everyone expects the U.S. economy to improve…and for interest rates to rise. That’s why people are generally bullish on stocks but bearish on bonds.

But if you study the charts, and if the lines continue to move in parallel, that will not be what happens. Instead, the United States will soon begin a long, slow, soft slump that will push interest rates further down, not up.

The charts of stock trends line up almost perfectly. The bull market in the United States follows the Japanese pattern, with a 10-year lag.

The charts of bond prices line up similarly.

"If one believes that the 30-year parallels shown in these charts will continue to hold," says the report, "…then one believes…

1. The stock market is near a high for the next 10 years.
2. The bond market rally (already 22 years long) still has 10 years left to go.
3. The inflation surge is a big head fake. As the economy weakens, inflation rates could drop towards 0%…and deflation remains a potent threat.
4. The housing market could weaken. Lower interest rates have not helped Japanese real estate from sustaining a 13-year downtrend.
5. Savings should become more important. As the savings rate rises above 2% in the USA, a lot of this money (and 401(k) money redirected from stocks) will be put into bonds, driving interest rates lower."

Oh la la…dear reader…oh la la…

More news from our New World team:


Tom Dyson, from another rainy day in Baltimore…

– "From time to time, we aren’t sure the thesis in our book is correct," admitted Addison, as he paced about the office, stretching the telephone’s cord. "But every day, we still strive to prove it." Addison was speaking live on Tulsa Business Network radio, giving a live phone-in interview.

– Meanwhile, your misplaced Baltimore-based British editor was hoping to complete an assignment before leaving the office yesterday evening. To no avail…we couldn’t hear ourselves think. Addison had become so worked up about Japan, real estate crashes and deflationary spirals that he had raised his voice and was distracting the rest of the office.

– "But today’s evidence just landed in our laps, so to speak," continued Addison. "Today we received a great piece of validation for our ‘Japanese’ theory…it came via email from a portfolio manager at Smith Barney…"

– The thesis, of course, is that the U.S. economy is sinking into a slow, soft slump a la Japan. This is the conclusion reached in Financial Reckoning Day last year, and this, as Bill reminded readers earlier this week, is exactly what appears to be taking place: "Of course, we mistrust all predictions…especially those we make ourselves. But so far…a slow, soft slump seems to be precisely the sump hole into which the United States is sinking."

– The evidence, to which Addison refers his listeners in Tulsa, arrived in graphic form…two charts, to be precise. On the first, we see Japanese 10-year government bond yields between 1988 and 2004 overlaid with U.S. government bond yields from 1996. On the second chart, a graph of the Nikkei 225 from 1976 is compared with the Nasdaq bubble, so that the bubble peaks are lined up. In both cases, the U.S. data track the Japanese data with eerie precision.

– "The consensus view is that the economy is on the mend, profits are climbing, and Alan Greenspan has finished his financial rescue," says our anonymous portfolio manager from Smith Barney. "I disagree with this assessment."

– The research note explains: "After every primary bull market, there comes a primary bear market. The greatest bull market in history ended in 2000. This bull market was eerily similar to the Japanese bull market, which ended 10 years earlier. I believe there are many lessons to be learned from the Japan experience, and I am heavily overweight bonds with a gold hedge in my portfolios. This is a long-term position."

– Bond investors agreed yesterday. And the day’s data back them up: The CPI was down, while jobless claims went up – a perfect 1-2 combo for bond bulls. Analysts had expected both the CPI and the core price index to rise by 0.2% from last month’s reading. Instead, both measures limped to a 0.1% rise. "There’s no inflation," they say. "Greenspan can print as much money as he wants, but it’ll never make any difference."

– And more Americans applied for unemployment benefits last week, 16,000 more of them. This time last year, 401,000 workers made claims, now it’s down to 333,000.

– On April Fool’s Day 2004, Uncle Sam paid you 3.90% for the use of your money over 10 years. The next day, April 2, the news emerged that the economy had added 308,000 new jobs in March. Just six weeks later, and another 300,000 jobs, and the yield had risen to 4.87%.

– But yesterday, bond traders pushed yields to a new five-month low. Ten-year yields fell 10 basis points to 4.07% by last night.

– Over at the stock market, the Dow Jones Industrial Average climbed 13 points to 10,244. The Nasdaq also closed the day higher, improving 8 points to 1,904. In the commodities arena, gold lost 30 cents to $404.30, while NYMEX WTI crude added about 35 cents to $44.04.

– The dollar continues to consolidate in the $1.20-1.25 range, even if it slipped a tad yesterday. With a loss of around 40 points, the dollar has settled back to $1.2173 versus the euro in overnight trading.

– Of course, here at The Daily Reckoning, we would assert that the future direction of long-term interest rates is the single most important factor in economics. It’s a question that is currently plaguing the capital markets, and one that makes this such a speculative environment to trade in.

– If we knew the answer, we could take positions in stocks, bonds, currencies and commodities and be confident in making profits across the board. But alas, we don’t…and neither does our anonymous portfolio manager from Smith Barney…"I realize that we will not necessarily turn into Japan…but we might," he writes.

– What about you, dear reader?

– And finally, here’s the conclusive piece of evidence…Financial Reckoning Day has been nominated for the Prix Européen du Livre d’Economie. Short-listed for a prize in European economics! Who would have thought it?

– Not Addison, he nearly spilled his coffee. You see, dear reader, last year’s prize was claimed by a former World Bank president and chief economic adviser to Clinton, Joseph Stiglitz….

– There’s never been a better reason, says Addison, to distrust our predictions.


Bill Bonner, back in Paris…

*** Our letter from a member of the clergy brought an outpouring of correspondence. Apparently, many members of the First Estate did not agree with the letter from the Midwest pastor who urged us to stop kibitzing and have more faith. We include a couple of responses here.

*** "In reference to the letter from a minister who thought you should have more faith and stop being so negative…well, what else would you expect from him? Faith is a minister’s currency – it’s his job to keep believing despite a lack of evidence, and even to believe in the face of evidence that contradicts his position.

"America at the moment, with its faith-based currency,
faith-based economy and faith-based government, might be a heaven for those who love faith, but it’s a hell for those of us that respect evidence.

"As an atheist I have little respect for faith and much prefer following the evidence. From my perspective, you guys face the harsh economic realities daily and point out the evidence accurately for whoever has the sense to listen. In my opinion, you manage to do all this despite the handicap of being Christians and thus having been trained since childhood to treat faith as a virtue."

*** "I was fascinated to hear about Pastor Nordberg’s comments regarding the future. He must be reading a different Bible than I am. Perhaps his Bible has some books missing, like the book of Proverbs. The whole point of the book of Proverbs is that what ought to happen usually does. In the short run, and in specific cases, the wicked prosper. In general – and in the long run – only diligence and hard work lead to wealth. In general, what is true for individuals is also true for nations. In general – and in the long run – nations rise and fall because they deserve to.

"The Bible is a very practical book. Things may work out for the wicked in the short term, but in the long run things work out for the righteous. What ought to happen is what eventually does happen – if not in this life, then most assuredly in the next. False faith, like false hope, is useless."

*** "Your critic is right: Things will ‘work out.’ But ‘working out’ for the people of ‘real faith’ includes trials that purge the impurities from us, and ‘working out’ for the people of ”faith’ as a cover for recklessness, greed and stupidity’ means destruction. Yes, ‘things will work out,’ and that’s why we need the warnings you provide. The warnings help us see the coming danger: Proverbs 27:12 (ESV) ‘The prudent sees danger and hides himself, but the simple go on and suffer for it.’

"And, in gratitude for the warnings you provide for us, let me also pass a caution to you: Don’t get caught in the same greed as those reckless and stupid people you write about. Though you may avoid the financial pitfalls that recklessness and stupidity will bring, the end result will differ little for those who are enslaved by greed. Not that I would accuse you of this enslavement, mind you, but some of your advertisements seem to appeal to this deadly sin."


We’re no angels. We sell to sinners as well as saints.

*** And our own correspondent from Pittsburg, Byron King:

When you talk about "faith" in the context of modern American society, I certainly understand your point. Looking at the hard facts of the predicament of the United States in this world – the colossal debt, the profound depletion of resources, the precipitous decline of the industrial base, the demographic challenge – it is difficult to envision how things will work out to create a better correlation of events for this nation in the long term. It is as if the nation’s strength, its historically "strong dollar," has also been its long-term curse. With a strong dollar, the politicians actually think that they and their nation are immune to flaw or failure.

Still, speaking of "faith," I am reminded of the story of a Navy chaplain named Lieutenant Howell Forgy, of the cruiser USS New Orleans (CA-32). During the Japanese attack on Pearl Harbor on December 7, 1941, an enemy bomb exploded near his ship and knocked the electric power off-line. The ammunition hoists ceased functioning. Dozens of sailors instantly formed a "bucket brigade" to pass 5-inch shells up from the magazines to the antiaircraft guns. Chaplain Forgy joined in on the difficult, backbreaking effort of moving big bullets to topside.

Soon, one of the junior sailors noticed that his impromptu comrade in arms was not just an officer, but a man of the cloth. The sailor said, "Hey Father, do you have a prayer for us?" The chaplain looked at the sailor and said, "Yes, kid. Praise the Lord and pass the ammunition." USS New Orleans survived the Pearl Harbor attack, and over the next four years went on to earn 17 Battle Stars for combat actions in the Asia-Pacific Theater (including having her bow blown off during one of the epic sea battles at Guadalcanal).

So do you see? Faith works. But the evidence is that faith works best as long as you continue to break your back and pass the ammunition.

I think that this would be a good story for a politician to use in a stirring speech to a national audience. But then he would have to "pass the ammunition" and ask the American people to start paying down debt, redeveloping resources, rebuilding the industrial base and defending the nation’s borders and culture. I suppose that it is a rare politician who is willing to risk getting his bow blown off. But you never know.