Howdy-Doody Time

Here is another article which suggests the next Recession will only be a Recession of Corporate Profits, not a Recession of Lost Productivity. Some may ask what I mean by that Statement. My basic Contention asserts that standard Business practice remains vibrant, and will continue to be so; but intemperate release of Corporate Stock Issuances, couple with the involved Credit instruments designed over the past two decades, have proven to be a failure. The funds desired were raised, though only by the creation of a Chain Letter of Debt, which Everyone now finds to be very difficult to repay. It is likely to be the first Recession, if it comes, where Employment is not threatened in economic measure; and one where, for the first time, the Money Managers will be seen applying for Unemployment Claims.

Here is another example of the new Money Management style, and I would advise the use of extreme care in the purchase of 144a securities. Small Investors should be extremely worried, as 144a issues are needed by Hedge Fund operators in order to generate the high levels of Profitability which they find a necessity, both to pay themselves and to attract Investors to their Funds. Investors must understand that these high Profits come only with an extreme degree of Risk attached, and no way to identify and confirm the real degree of that Risk. My younger Readers may not understand this statement, so I will state that if these Type securities match historical records for such securities, some 14-16% of the Investors will not see their Money again. These securities are not for Retirement-directed accounts.

Felix Salmon seems to have some degree of residual issues with Ben Stein. One should not get mad at a Writing Hack who makes a good Paycheck. He might have done better to simply refer to his own Argument which highlights the deficiency of the Banking Group Boards. Both reach the same end, though, that the Board members should be replaced for being asleep at the Switch. Stein does not like Rubin, and Felix does, but both Merrill Lynch and Citigroup are involved in the new 144a market setup, so We can await punishing the delinquency until such time as We can file Criminal charges. lgl