How to Become a Millionaire

How to become a Millionaire without really trying? I would say that I was happy for Paul Krugman, but would face charges of hypocrisy. He makes a hell of a good Model, and–well, might write a little better than I. Still, I possess the belief there will be some error found in his Trade models as Time passes, but when did that ever slow the Nobel Award process? He might even have had to Sell Out, and promise never to criticize the Nobel Award system again in his Commentaries. I will be a good Soldier, though, and congratulate him on a Award for which he put in real Time, Thought, and Invention.

The Markets are appearing to claw their way back at mid-day. I don’t believe that Oil will reach $100/barrel this Year, because OPEC needs the volume of revenues and won’t cut Production, and any greater increase will create a Wobble in other Weak markets; which cannot hold Gains in the presence of higher Oil Costs. The pressures are far worse in Europe and emerging economies than in the American economy, where Profit ratios can be wiped out with a 12% rise in Oil price. The Political process presents greater insecurity, with most Markets elements fearful that their favored Candidate will lose Big. The incumbent Threat is altered Tax Schedules, where Accounting practice must be changed, which might entail a different methodology to garner Profits. The Markets hate Changes in the Rules, even if they are found to be beneficial.

One has to ask if Bankers have yet learned their Lesson about Risk Management. Europeans appear too willing to follow Americans down the Primrose Path. Most People do not understand that One cannot quantify Risk, not in the terms at least that they would utilize that quantity. Reference should be made to Benjamin Franklin’s Statement of Hanging Together. Anytime more than 2% of the Total Volume of Credit fails–the Entirety fails. One cannot withstand major losses in any Sector without all Sectors finding a drain of Cash. Devotion on nothing but Growth hides the real danger of Risk, and too many Children burn their fingers on the fancy Toys. I have great Respect for maintaining Reserves, both in Banks and in Investment portfolios. An intelligent Child increases his Reserves in safe vestibule as his Portfolio grows, risking only about 70% of his Wealth on Risk Growth. lgl