Friday, October 31, 2014


Watch the news, pick up a magazine especially newspapers, watch the TV and immerse yourself in the "everythings wrong" philosophy.

The democratic process, with its unbelievable capacity for openness and sharing of thoughts, seems to thrive on conflict. This conflict results in a vibrant Nation that lurches forward with small and gigantic steps.

All around us the pundits of doom sell negativism.

The reality is anything but. The enormous strides made by democracy and capitalism in the last few decades are incomprehensible. Almost every country has seen the standard of living of its people rise. There is no longer a significant chance of slipping back into extreme socialism and communism. All about us the engine of American and World creativity is blossoming into a whole new era that is only at its beginning.

Cars are changing, jet planes are making huge strides, biotechnology is still alive and well. The immensity of the Internet and all the companies that are continually being spawned is almost too much to grasp. Old industrial America is stabilizing. Revolution in America is not realistic for many years, if ever.

Markets get ahead of themselves, competition for profits is intense and there is a continuum of winners and losers in most spheres of life. The government in all its confusion functions. There is an awareness that so many major components of our democracy need revitalization. So all is not lost.

The market doubled too quickly from its lows. No one I know bet the house on 1 1/2% 10 year government bonds. Most observers are focused on everything but the real picture.

The real picture is our ingenuity. The fact is that most people go to work everyday and most enjoy their jobs.

The deficits will not sink the ship (although they should be brought down). Europe will not sink. Greece will still be there and so will Spain. And Russia, with all its recalcitrance will not do anything stupid. So seek your opportunity, use common sense, pay attention to what you are doing and praise the fact that everyday there is opportunity.

Wednesday, October 15, 2014


There seems to be so many negative headlines lately, Ebola, ISIS, Russia/Ukraine, Hong Kong Riots, Stock Market volatility, Destructive corporate policies, Secret Service scandals, Veterans Administration, IRS, Obamacare website fiasco and on and on.  All of these situations can be traced back to President Obama if only because he is the CEO of the nation.

His lack of action, his wrong actions, his inability to select experienced leaders, his inability to retain qualified leaders, his passivity, and his basic lack of experience is obvious.

He was elected on the premise of change. The reality is he has changed little for the better.

Tuesday, October 7, 2014


A friend of mine bought a home for $300,000 ten years ago. By 2007, the price of similar homes in their neighborhood had tripled in value.
During the period when the price of housing was rising so rapidly, banks were criticized for collecting deposits in one impoverished area of the country and lending it out in other more prosperous regions. The quality of the loans was not a factor, the equitable distribution of loans seemed more important. People all over the country were ecstatic over their increase of wealth through home ownership.
The government, in spite of everything, had created Fannie Mae, Freddy Mac and everything possible to increase home ownership. Practically no one was telling homeowners to liquidate their homes. Construction of homes was booming, millions of people were employed in the sector and no one dared to stop this lucrative bubble.
When the house I mentioned above was purchased in 1999, it would have taken approximately 1000 ounces of gold to pay for the home. Today, it would take only 250 ounces of gold to buy the same $300,000 house. Housing prices have “crashed” and gold has soared. In effect, gold has gone from $350 per ounce in 1999 to $1300 per ounce today.
Gold is basically a useless commodity. The price is a “bubble” that may sustain itself forever and ever, but it is a bubble. You can’t eat gold, it’s hard to carry, it earns you no money and its industrial uses are limited. Again, no one dares to tell people to sell their gold even though you can now buy it in vending machines. No one dares to tell the mining industry to stop the production of gold, for fear of destroying yet another industry that is responsible for the economic livelihood in many struggling countries.
Keynes said that in the end investing is nothing more than a game of musical chairs and that when the music stops; we don’t want to be the ones without a chair. old. When interest rates rise, gold will crash.

Sunday, September 21, 2014


I am seventy five years old.  I was a young boy during WWII.  It was commonplace to be exposed to stories about the Germans in which children were rewarded to come forward to snitch on their parents or family.  These young children were following the Nazi propaganda line.

Many adults looked in dismay as a country rewarded children for being whistle blowers.  It was considered an abominable breach of most American's ethics.

Now in America we reward, with substantial gifts, those who help our Justice Department and SEC prosecutors capture and then punish who are often their friends and colleagues.  Our sense of justice is to tell people if you whistle blow, you can get rich and if necessary go into the witness protection program.

As Americans we have actually come to accept this as an appropriate approach to the pursuit of crimes.

I have great difficulty understanding how we abhor the actions of the children of Germany, but find little ability to speak about whether we want such behavior in our own country.

Thursday, September 11, 2014


Sometimes common wisdom is way off the mark.  Over the last few years we have pointed out that the PC wasn't going to disappear, the price of gold  was overblown, the pundits of gloom were mostly not worth listening to, the occupiers had little case, the deficit was substantially media hype, and the appeasement of enemies is generally not a winning strategy.

What I am going to say now seems absurd on its face, even to me who is writing it, but here I go.

My parents were born in Russia. Their citizenship papers say they were born in Russia.  Specifically they were born in Ukraine, Russia.  In my family it was taken as a statement of fact that they were from Russia. I took a look at Wikipedia and it was obvious, for several hundred years, Ukraine was considered Russia.

Somehow or other the Union of Soviet Socialist Republics, the name Russia was called by, ceded Ukraine to its own independence.  Now there is man by the name of Mr. Putin who thinks that breaking up the union was a very negative development for his country.

The Civil War in the United States was initially about maintaining the union between the North and the South, it was not initially fought over slavery.  I'm not sure that maintaining the Russian union is not as important to them as it was to us during the Civil War.

What am I missing?

Wednesday, September 10, 2014


When the Syrian insurgency began President Obama was given a "one time only" opportunity to quickly prevent escalation.  Inaction was followed by inaction and well over 100,000 people have been killed, wounded or misplaced.

The complexity of facilitating an end to the carnage now, creates a much more difficult, expensive. risky and limited set of options.

As we wrote in an earlier blog, the cost of ending atrocities early would have been much less than the cost is today and the longer term implications of inaction are not any clearer.

The character of any President is most tested when issues of life and death for many take over the landscape.

Thursday, August 28, 2014


Russia will begin to cut back on natural  gas supplies to Europe and an invasion of Ukraine is probably not far off.