This Carbon Based Life

By David Glenn Cox

It’s Murphy’s law, I suspect. Like millions of Americans yesterday. I was watching all things Epstein. Generally, I check on Wall Street at least once a day. Because I foresaw this coming. Experience is the best teacher and now it looks as if the remedial class is about to begin. On Tuesday, Bloomberg had a talking financial head spewing the unusual rah, rah bullshit. They asked, “What about the lowest consumer sentiment report since 1951?” Who remembers Eisenhower?

His answer made me laugh as he explained that he’d been all over the country. And he’d spoken to a lot of people, and he just didn’t see that negative sentiment out there.” It made me stop laughing, as I thought. These are the people you trust to handle your money? Never mind the facts and figures, trust me! But I stopped laughing when I realized this is a symptom of what is coming up ahead.

They felt the same way in 1929. Stocks had been going up continuously for months. Even as Industrials and manufacturing had been falling. But pay no attention to the facts and figures, stocks are going up! Then quietly, the big-time investors began to sell out. The smart money selling out to the dumb money.

Warren Buffet is out sitting on $325 billion dollars in cash. Elon Musk just squeezed the lemon and took a trillion dollars out of Tesla. I wonder what he needs all that cash for? SoftBank just sold their entire $5.8 billion shares in AI chip maker Nvidia. That’s a Wall Street equivalent of “I like you as a friend. But I think we should see other people.” Everywhere you look, CEOs are being fired. Mostly around industries involving credit. The CEO of CarMax just got the ax. Consumer sentiment, perhaps?

That’s the rub, faith based financial planning. Sales didn’t meet our expectations. This must be your fault! It couldn’t be struggling consumers. The AI bubble is bursting. Brother, it’s gonna be the next big thing! I can feel it in my bones! Everyone was certain of it. It was what we call down in Alabama, Sboatabee.

It was sboatabee, the next big thing. It was sboatabee, the vehicle that made us all rich. But sboatabee has never showed up. Everyone was so certain they kept dumping hundreds of millions of dollars into all kinds of AI stocks because of sboatabee.  Borrowing millions to invest in sboatabee. “Someday my prince will come!” A distant ship’s smoke on the horizon! Hurry, hurry, don’t be late! Someday my ship will come in, or maybe not.

I read about one AI startup that had $1.5 billion in debt. They just took out new loans for one billion more by selling junk bonds. Stop me, if you’ve heard this before. Guess what they needed the new billion dollars for? New products? Innovation? Big technical breakthrough? No, the new billion is to pay off debts from the old billion. Does that sound like a healthy company to invest in? Take my money! I insist! But AI is turning into a black hole. Just shovel your money in as fast as you can. Then sit back and wait a year or two. What? You need another billion? Here you go. Don’t spend it all in one place!

Smoot- Hawley tariff of 1930 and Trump. Tariffs are a tax paid by the buyer. In a consumer economy, it’s the old double whammy. Spurring inflation while depressing consumer spending. Take the case of a grocery store. That $11.00 can of coffee is now $14.95. On paper, at least, the sales numbers look good. Better than ever! But the grocery store has to pay more for their products to make the same profit. Sales and profits are actually lower than before. It ain’t sboatabee like that.   

Because of the government shutdown and the perfidious nature of Donald Trump. The Bureau of Labor of labor statistics might not publish October’s data. According to Kara Lying Leavitt, the data might be limited from now on! If the great orange Dumbkin doesn’t like the data, you wish it away into the cornfield. But for Wall Street that is driving while blind. It’s telling ghost stories after midnight and frightening the little children.

So yesterday’s 800-point plunge wasn’t really eight hundred points at all. The plunge protection fund kicked in. Spending hundreds of millions, if not billions, buying up bell weather stocks to buoy the market. So it was maybe actually a 1,400 or 1,600 drop anesthetized to 800. When the market calms itself and begins to rise, the plunge protectors sell off the stocks. Sometimes earning a tidy profit. But if the markets don’t calm themselves. They must do it again and maybe again, until eventually they run out of money.

Inside of the orange house, the pseudo leaders scratch their heads before hitting on a solution. Perhaps we should cut the tariffs! (Comedy, thy name is Trump.) Too late. With fear screaming in their ears, put it back! Put it back! Put it back! You can’t uncrush an economy. Trump proposes a $2,000 dividend while ignoring, if he loses his tariff case before the extreme court, there won’t be any tariff dividend.

Let’s review. Trump says if he has to refund all of that tariff money (Trillions and trillions of dollars.) Actually $194 billion. The United Snakes will be reduced to a third world country! So, now that the tower of Jell-O is shaking, he proposes to give all the money back? So what was all this tariff nonsense for in the first place? The same thing, “put it back! Put it back! Put it back! Quick! Too late!

Friday’s are hell day on Wall Street. It’s like taking your hands off the wheel for two days when God only knows what could happen before Monday’s open. It’s like leaving your car unlocked in a bad neighborhood and hoping it will still be there when you return. Better to sell now. Plus, you have the Trump factor of a fearless, clueless leader devoid from reality who would rather pretend the problem doesn’t exist than to publicly address it. “You know, this is all Joe Biden’s fault!” First comes the wound and then comes the slow bleed out.

Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision, the people perish.

The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men.

Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.

Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now.  – Franklin Delano Roosevelt