29 September 2008

Well, I told you so...

Or at least, I would have if I'd had the time in the last 9 days. Those of you know me know I've had a handful to deal with in the last couple of weeks. Ever since I got back from Peru, it's been conference calls at 5am for the pre-market, and lots of CNBC on the weekends.

I'll break it down for you. We're damned if we do and damned if we don't. The bailout, I mean. If we don't, you see how Wall Street is going to act--like a spoiled child with its favorite toy (government funds, natch!) taken away. Down 777 points is a prelude to a kiss. And let me tell you, it won't be pretty from here if there isn't a bailout.

Let's talk about "bailout." Who exactly is being bailed out? Wall Street? Wealthy bankers? NO.

Who's been irresponsible? I'd argue that the greed, avarice, and wanton spending has been happening in lots of places, including Wall Street. But the bulk of it has happened on Main Street, with US Americans who are willing to mortgage themselves to the hilt with their own greed, charge up their credit cards beyond what they can pay, and generally expect that they shouldn't take responsibility for their own actions. Blame, these days, seems to belong on pretty much everyone but the guilty parties.

So today's failed plan? I'd wager that the yokels in the House got lots of calls from their yokel constituents, who threatened not to reelect their representatives if the bill passed. I can just hear those calls now: "Don't bail out wealthy bankers! I need that money! Give us a tax break!" F.

Let's talk about that for a moment. I saw an asinine email circulated where some clever idiot calculated $87 Billion as being $400,000 per person (with 200 Million people). Really? It's math like that which got us into this mess. It's actually about $400 per person, and it doesn't come from the sky. It comes from taxes, or from deficit spending, which is a little like a cash advance on a credit card, only without as much regulation and disclosure. You want more regulation? Regulate the Federal Reserve (their low interest rates--thanks Greenspan--fueled the credit storm to Katrina proportions) and the government ("tax rebates" when you're running a trillion dollar deficit are a fallacy--they move consumption into current periods with an outsize cost to the future).

And (as they say on NPR's Marketplace) now let's do the numbers:
$11,000,000,000,000 (that's $11 Trillion) = Our Nation's Debt
4% = our cost of borrowing (roughly equivalent to the 30 year T bill)
$440,000,000,000 ($440 Billion) = Annual INTEREST costs. Only interest folks. No principal.

But how much do we make? Surely we make a LOT more than that!

$2,400,000,000,000 ($2.4 Trillion in 2006, according to the Congressional Budget Office)

But wait a minute, Vern! You mean to tell me that we spend nearly 20% of our INCOME on interest alone?

Folks, I'll make this very simple. We have said with our wasteful spending that we're spending our children's futures. Well, we've been saying that for about two generations now, so it shouldn't really come as a great surprise that, at some point, the bill comes due.

It is due. Taxes will rise. Services will decline. If not, the credit quality of the US will suffer, and we will soon be faced by a situation like this:

In 1956, we engaged in quite a scuffle with Britain and France (who were allied with Israel) over the Suez Canal, Europe's key link to the Far and Middle East. Britain and France decided that they could act unilaterally in their own self interest (sound familiar?) to prevent what they saw as a clear military and economic risk (sound familiar again?). While their attack on Egypt was successful, it was a fatal mistake.

The United States, flush with a powerful trade surplus, national savings and vast foreign reserves (this should also sound familiar--China, anyone?), said something very simple to Britain: Do what we want, or we will unload our holdings of your debt, devalue your currency, and send you into a Depression. Britian relented, without a shot fired. Their military strength was irrelevant. Many consider that to be the exact end of the British Empire, and the beginning of America's hegemony.

Folks, let's be clear. China has $770,000,000,000 of our debt, and could easily engage in the same strategy if we ever pissed them off. We would be helpless. Our military would be irrelevant. We would bend to their will.

This is not the fault of our government, necessarily. The Average American keeps a credit card balance of about $7500, and average household debt is about $19,000. "Sable Crow, that's not so bad," you say? You're probably making too much money. According to one statistic I found, about 50% of those that owe $10,000 in non-mortgage debt make less than $50K/ann.

This tolerance for debt has corrupted our nation. Don't get me wrong--I love banking and I love lending for a profit--but our willingness to borrow beyond our means and never pay it off is what's allowed our politicians to justify it on a scale that is frankly criminal. So who can we look to for help? Sadly, nobody.

The Republicans--despite their business-friendly retoric--are intellectually bankrupt when it comes to finances. Just check this chart. F. And that's as a percentage of GDP. As a percentage of our actual national income, it's MUCH worse.

The Democrats are more honest--they'll be clear they're going to raise taxes on a few people. But they need to admit that their nationalization projects just aren't economically feasible. We have to raise taxes, alright. But it's not to add services. It's to pay for what we already spent.

My dear Reader, I don't mean to depress you on a day when your stock portfolio has been so hammered. I believe, however, that it's important that we keep our collective eyes on the relevant ball. Save your pennies. Reduce your spending. Sell your bags, and invest. Stop consuming. Hold people accountable. And wear sunscreen.

20 September 2008

Peru: The Ruins

Okay! Before I start on the economy, I thought I'd give you what you really came for: RUINS! This is what our civilization would have looked like if our government hadn't bailed everyone out.

Inca stonework is flawless: no errors, no mortar.

The double gateway, representing the physical and spiritual world, is sacred in Inca architecture.

Sacsayhuaman. Not Sexy Woman. Sacsayhuaman.

The road to Pisac.

The waters still flow 500 years later, though the people are gone.

The long way down from Pisac. We hiked to that town in the distance.


Machu Picchu.

The Hitching Post of the Sun. Sable Crow meditated here as dawn came to Machu Picchu.

Morning comes to the Inca steps. These were used for farming.

A curious resident. 15 llamas graze Machu Picchu. Groundskeepers.

Machu Money-Shot

19 September 2008

Sell Your Bags

Sable Crow has been very busy this week, presiding over his little corner of the world, marvelling at the INSANITY that is the financial markets. More this weekend. I have many opinions, all of which are right: why this problem happened (the real reason), what's coming next, and what we should REALLY be afraid of.

News from the vanguard of capitalism.

14 September 2008

Peru: The People

For me, the value of travel comes from observing other people going about their lives in ways that are different than my own. Sometimes it's the glimpses into these "other" lives that help explain my own. Here are some of the people I saw, from guides to shopkeepers.

13 September 2008

Peru: The Food

I thought I'd break up my trip to Peru into several sections. Over the next few entries, I'll blog about various parts of the trip. I think it'll be more of a sensible narrative for you, and then you can better pick the part that interests you most.

I tried to be pretty adventurous in Peru, and the food there--which is influenced by Chinese and Italian cuisine--was a good way for me express adventure in a relatively safe way. After learning how to brush my teeth with bottled water (mostly the learning came from breaking the habit of rinsing my brush in the sink...), it was relatively easy to feel daring enough to try guinea pig and alpaca.

Now, I had a guinea pig when I was a kid. She was my first pet, and I loved her very much. Let me be clear, however: I accept my position near the top of the food chain, and I will wear the mantle of that honor when the time is right. This same principle is at work when I swim in the ocean, where I am DEEPLY aware that I am NOT at the top of the food chain, and where I am always concerned that I will get my legs chomped off by Jaws.

Guinea pig in Peru isn't so much a "delicacy" as it is a special treat; a little like a Thanksgiving turkey for us. For those of you disinclined to try guinea pig at your next opportunity, it was a gamey, fatty meat that reminded me of quail when served on the bone (lots of work, little meat) and of duck when off the bone (a little greasy and savory).

Guinea pig (off the bone of course) on a spicy yellow rice base. The green things were green corn tamales.

I travelled with my alma mater's young alumni travel club, so I had lots of company for meals. The first place we went was Inka Grill, right off the main square in Cusco. It was fabulous, and one of the best places we ate during our trip. It was at Inka Grill that I was introduced to Lomo Saltado, a stir-fried beef dish served with rice and fries that is the PERFECT Sable Crow dish. Yum.

Lomo Saltado. Good for the soul.

The Coke in Peru isn't made with high-fructose corn syrup (fuck the American corn lobbyists). And caffeine is the last thing on the ingredient list. The result: no sugar rush and no caffeine buzz, just fizzy, delicious Coke.

This was a delicous meal at a museum restaurant in the same restaruant group as Inka Grill. It was delicous.

Steak with egg on top and a tasty sauce. Fried rice fingerling with fried plantain.

The alpaca skewers are below. They were very good.

Alpaca with fried plantains and an assortment of traditional Peruvian foods. Those strips of hard white cheese were to die for.

Though there are no photos of the food at Fallen Angel (I was too distracted by what WASN'T on the menu), please rest assured that this restaurant--in the same courtyard as Cusco's finest hotel, where we did NOT stay--was superb, and the atmosphere really first rate. The food was entirely steaks, and entirely delicious. Like Fernando and Carlos. Fallen Angel becomes a bar on some nights of the week, and is Cusco's only hint of gay culture.

The stars of the heavens.

Pigs flying in hell.



Florence warning me to behave.

On our journey between Ollantaytambo and Pisac, we stopped for a baronial trail lunch prepared for us by our guides. It was delicious. It was also supposed to have been served to us on a remote hike, but a nationwide transportation strike during our stay prevented us from completing that adventure. So our cooks hiked BACK down the mountain will all the food, and prepared it for us in a soccer field in a village between our two destinations the following day.

Not all the food was great. This little gem of a restaurant on the central courtyard of Aguas Calientes (Machu Picchu town), I suspect, is the source of my unhappy insides for the last week.

But a happy ending I will have, and our final, going-away dinner was at La Mar in Lima, one of the best hotspots in town. Imagine you're sitting in your favorite LA or NYC restaurant, laughing over a glass of wine and some killer cebiche, when a TOURIST BUS pulls up and unloads a bunch of loud, obnoxious, entitled tourists flaunting their powerful currency and generally running rough-shod (in their HIKING clothes) all over your nice dinner. That's basically what we did. "F" for the planning on this. We were too exhausted, had no time after the dinner to change before our flights, and had no time before dinner to change from our hiking clothes into something more appropriate. We could have been contenders. Instead we were boors. Too bad! The seafood was FANTASTIC and everybody ordered different things, then we all shared. It was too much food to photograph well, so here are a few shots as the night wore on, drawing our trip to a close.