Ah yes, the predictable perversity of the market. It comes out that 95,000 jobs “vanished” last month, and so — of course — the market rallies hard and the Dow rockets above the psychologically crucial 11,000 marker. Bad news is good news is great news.
We’re in full blown 1984 mode, where the only way you can describe any economic news is to call it “ungood” rather than what it really is: just plain terrifyingly bad.
I posted on one of my sites today that I felt almost every U.S. stock is overpriced now, given anemic earnings, rising real unemployment and ongoing concerns about the strength of the American consumer’s wallet. (What wallet, by the way? I wish I could afford a wallet, to put things in. America has turned into a trailer park slum run by Tea Party media personalities. We own nothing in this country anymore, except for meth labs, Jersey Shore, our DirecTV dish and the occasional silver or gold coin which we cling onto with a Gollumesque wild-eyed obsession, since we all instinctively know our currency is being flushed down the toilet as we speak — hence the insane rush into equities, I suppose.)
Let’s take a step back for a moment, though. Thought experiment time. Pretend it’s right before the year 2000; that was only a decade ago, right?
Our biggest collective fears were pretty much along the lines of: “Oh, is it going to cost a lot of money to upgrade my computer before the Y2K thing hits?” and “Should I ring in the new year in New York or London?” and “My life as an affluent middle class white man is so difficult! I’m going to watch the American Beauty DVD again on my big-arse television.” Serious societal problems!
Skip ahead to 2010: Recent college graduates are living in Fight Club style squathouses, everyone is unemployed, everything is shady. Apparently the only growth engine left in the U.S. is the erotic services section on Craigslist, and Facebook, a site designed to keep unemployed people preoccupied in public libraries for hours at a time.
Which reminds me: go to a public library sometime. Seriously. You’ll see no one reading books. Instead, a sad, endless wave of old people around my parents’ age, waiting in line to use the public computers.
Once on, they have to move swiftly: the connection terminates after 60 minutes of Web browsing, so another lost soul can skim Craigslist and Monster.com for sketchy job opportunities. All those arthritic hands angrily hammering out cover letters, and closing out pop-up windows, and attaching PDF resumes for that part-time opening at the Home Depot.
It’s all going to be OK in the end, though. Do you know why? Because Warren Buffett and Bill Gates have trekked the globe, along with the help of attractive CNBC journalists and various other media sycophants, to get all the billionaires on our dying planet to pledge to give at least half of their wealth to charity before they die.
Only problem is, the thing they sign is a “moral” commitment. It is not a legal contract to give.
In other words, it’s all a PR stunt. Having a savvy billionaire sign a moral agreement to give away half of his or her family’s wealth before death, with no legal obligation or penalty for termination whatsoever, is about as set in stone as an IOU note posted on the refrigerator after you take the last of your roommate’s toilet paper.
It’s total bogus. Many of the billionaires Gates and Buffett have approached made their wealth, at least in part, thanks to the enduring power of the written contract.
But instead of relying on such a contract, Buffett is content to get a Scout’s honour from ruthless Chinese captains of industry that they will eventually give half to the needy? Sounds rock solid to me!
I’ll be over here in the corner, counting my handful of tarnished silver coins, and waiting for the market to come back down to a reasonable level, if only so I can buy as much McDonald’s Corp (MCD) stock as humanly possible.
Even the unemployed and broke will need to eat. And they’ll probably eat cheap.