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Egoist Not Egotist
Over the holiday weekend my son and I chilled in Soho, New York, where there is always a cool scene, lots of good-looking people and cars. At a red light, there was a Lamborghini Murcielago whose license plate read: "Humble." Initially, my son and I chuckled at the hypocrisy or odd understanding of being humble, but then it struck. I'd been thinking about the difference between egoist and egotist for a while and this was a great way to attempt to illustrate the differences.
I realize there is a complicated philosophy and different interpretations of egoist, but for me, the thing about being an egoist is it's not about you, per se, but about each individual having a high desire to do their best for their own well-being. Seems to me this was the core feeling at the start of time when day to day survival was always in question. So maybe these days critics would call an egoist a caveman. I have no problem with that. In fact, let's tap into our inner caveman so we can take on challenges facing this nation with raw determination. I can say right now we need leaders that encourage self-determination and not this stuff about being too weak to make it alone.
I want a nation of Lamborghini drivers, not everyone taking public transportation.
When to Close the Barn Door?
I'm no genius, but I must say listening to the experts pontificate day after day about solutions makes me want to scream. Is anyone in charge in Europe, and what are they waiting for to get their act together? If the Euro is a bust, then call it a bust, and let's unravel the damn thing. If they are committed to making this thing work, stop with the song and dance act—get it done.
I guarantee the powers in charge know the answer, but in Europe it's about scheduling meetings to decide if there should be future meetings.
I feel like that Gary Larsen comic strip where the renowned music conductor is shown to the room where he will spend eternity. This is cruel and unusual punishment, and procrastination makes the final decision harder to implement and more expensive.
Every time one of these guys opens his or her mouth I hear "Dueling Banjoes." Of course, if Europe had its act together this wouldn't be the main topic of the day. If half the continent hadn't succumbed to the lure of the welfare state, we could be talking global recovery not impending doom.
Not to Be Outdone
Fed monetary policy could have worked so much better if there was decisive decision making. On that score, I'm not sure we can expect it to get better.
New York Federal Reserve President, William Dudley made the most confusing statement on when the Fed might spring into action:
"If the economy were to slow so that we were no longer making material progress toward full employment, the downside risks to growth were to increase sharply, or if deflation risks were to climb materially, then the benefits of further accommodation would increase in my estimation and this could tilt the balance toward additional easing,"
What the heck is the Fed waiting for? If they're going to be more accommodative it has to happen sooner rather than later as that would be like closing the barn door after cows have already left. Is the Fed looking at bond yields? Is the Fed looking at recent readings on consumer confidence and housing? Is the Fed looking at the free fall in crude oil? Is the Fed concerned with the negative wealth effect that comes with a stock market that's crashing?
On May 30th I interviewed Stephen Schork of the Schork Report on the implications of the swift freefall in crude oil prices. He mentioned a lot was the removal of geopolitical risk, supply bottlenecks, and demand destruction. I'm most interested in demand destruction in America and what that means for and about the economy. We don't want oil freefalling. Sure, cheaper gas is great except when you don't have a job, and then it's irrelevant. Stephen says the next support point is $85.00 but agrees that it doesn't have to hold. Keep in mind in 2008 the price plummeted to $40 from $140 in six months.
May was a disaster, but it's also been a warning, and there is no need for additional signs. If those with the power ultimately plan to act, they should make that move sooner rather than later. Forget the blame game. If it's all about negative signs, there are plenty to go around. Conversely, if those powers that be were intent on letting the economy play out, the pain may be sharper but it would be over sooner.
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