Well not so young any more but we are headed to California tomorrow for a week of family weddings and visits to old friends. Too bad, because thing are beginning to get interesting after weeks of pretty stale stuff'.
Puerto Rico got its deal. At least people are saying they did. Seems like it's is really something special. They owe God knows how many of billions of dollars but so far nobody is saying who is going to take a hit. As a matter of fact, all Congress really did was to put a structure in place involving appoint seven people to an oversight board who will make all the tough decisions. Don't you just love politicians? Now I ask my self, self, how do you pay your debts when you don't have any money? Never did get a good answer, so despite what some people are claiming, the bond holders are correct: they are going to get it in the neck. Admit it for gosh sakes! Now you may think this displeases me: au contraire...that's just the way it should be. It's not fair of course but what in life is? This has been a stinking credit for years and if you're dumb enough to keep holding the bag, why complain? The REAL problem is that in similar fact situations in the future some damn fool is going to do the same damn fool thing and suffer the same damn result because he (or she) is too damn stupid to learn from the past...or perhaps lazy is a better word. For example...
Illinois is broke; Chicago is REALLY broke. The Illinois Supreme Court has ruled that any reduction in governmental pensions is unconstitutional. Change the Constitution? Nah. The governor is a Republican, the legislature is Democratic and Rahm"never let a crisis go to waste" Emmanuel's--remember him, solution to his city's crisis is to raise telephone taxes AND issue $2,000,000,000 of new debt secured by real estate taxes. Now that of course means that real estate taxes will have to go up as well (hint: they don't pay for enough as is), but some damn fool is going to buy these bonds because the yield is going to be sky-high on the theory that there will always be a chair when the music stops.
The people that do will not be using their own money; oh no, they'll be "investing" on someone's else's behalf. Some day--and I don't know when--this is going to stop and when it does the only thing I ask of The Big Trader is to let me be around when it does. In the mean time, isn't it wonderful to see these guys almost break their arms trying to put their own backs? Anyway, I'm going to California. Why not? In this mad world it's the most insane place I know.
See you in a week.
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