Saturday, September 17, 2011

Review Of This Weekend's Barron's (Dated 19 Sept)

As I was pulling up to park at 7-11 today, I wondered if I would buy the current issue of Barron's, as I have mentioned before sometimes I do and sometimes I do not.


Well, when I saw the Cover Story (advising readers of the special "Penta" section they have every couple of months or so), I could not resist.  Penta is their special section subtitled "Trusted Advice For Families With Assets Of $5 Million Or More".  Do you want to see how the Really, Really Rich (acronymed the "RRR" from here on) live nowadays?  Check out Penta...

The Penta Cover Story is "Goodbye, Family Fortune" and shows a rich young punk leaning up on his car, wads of money spilling from his pants pocket with a horrified Mom & Dad there in the background in front of their mansion...  The picture is to die for...  So, that article is the one I review first.  "Goodbye, Family Fortune" is the latest article on an old problem.  What can you do if your kid is a lazy Shi'ite who mismanages the money that his ancestors worked so hard for?  It turns out it is not just English that has the expression "Shirtsleeves to shirtsleeves in three generations", the Dutch and the Chinese have their own very similar versions.  The article tells some horror stories and then goes on to suggest that parents begin educating their little schnitts about how to care for their money, money that was not easily earned in the first place.  It turns out that there are "Boot Camps" for educating Junior (mentioned is one that the U. of Chicago has twice a year: four days for only $8950.00...).

To get you all better into the spirit of how the "RRR" live, there are other articles there in the Penta section as well: "Ferrari Fever" (where rich Ferrari owners can take to the tracks in special races!), "Mansions of the Sea" (in which the author tells of the joys of renting 100 foot yachts during the Holidays), "Hot Watches" (describing ultra-expensive Swiss watches, the Patek Phillipe 'Grand Complication Ref 5216' sells for $785,000, bitchez!).  To balance it all out, there was also a handy article ("Audit Alert") in which Karen Hube tells what's up with recent IRS actions re the RRR and how to lower your profile...

Hey!  This is a public service I am offering here!  You NEED to know how your Superiors (er, the very rich) live!  Don't shoot the messenger!


Alan Abelson's latest "Downer, man" article touches upon Congress (among registered voters, only 6% of them said that most members of Congress deserve to be re-elected [R. Mix Note: uh, then WHY do they keep getting re-elected?]).  He then goes on to say that Germany may be too weak to carry the burdens of the PIIGS over there...  Finally, he has his doubts about the recent impressive advances in the stock market recently, but he is, after all, the Barron's Perma-Bear, probably kept there on display like a bear at the circus...


There is apparently a nice "Contrary Indicator" out there, that when over 30% of newly minted Harvard MBAs head to Wall Street, we are due for a tanking in the stock market.  We are at about 37% now.  The record high was 41% of the Harvard MBAs off to Wall Street -- and that was in 2008.  Hah!  Ruh roh!


Michael Santoli's "History Lessons" mentions two of my favorite as well as the financial community's highest rated books:

The Black Swan, (Taleb, N. N.)    (of course)
This Time is Different, Eight Centuries of Financial Folly (Reinhart and Rogoff)

The latter is must reading (uh, you know, if you are into that) in that "This time is NOT different", and what historically happens when countries get too far into debt (short version: it ain't pretty).  I recommend highly both books.


Jim Mctague's "D.C. Current" column excoriates (rightly IMO) both the Rs and the Ds for fiddling while the economy burns.


Visteon (car parts maker), Tyson Foods and certain European companies get the thumbs up in other articles.

There is an interesting article on some LatAm banks, putting out a bullish case for banks in Colombia, Chile and even Peru (Credicorp, the parent of Banco de Credito in Peru, "our (Ameru's) bank"!).


My FAVORITE article this week was Leslie P. Norton's interview with Jim Grant!  Two choice quotes will adequately sum up how Jim feels about everything:

"The euro is Confederate money."   [Ha ha!]

"It is the nature of gold that its valuation must forever be a mystery.  It earns nothing.  It pays no dividend.  No conference call, no management to call up and complain to.  What I do think is gold is simply the reciprocal of the world's faith in the institution of managed currencies.  It is one divided by T, where T stands for trust.  And trust is a shrinking number, and will continue to shrink.  Therefore I am still bullish on gold, bitchez."  [No, he did not say that last word, I just put that in there to see if you were still awake...]


Nothing new or of real interest (to me) in the Market Week section, not even over at "Commodities Corner", the article there explains the recent divergence of prices of Brent Crude and W. Texas Intermediate Crude, a story well covered at ZH.  Only a tiny movement in the Fed "Total" on its balance sheet.

Bottom Line: if you want to see how the "RRR" live, buy this weekend's edition!

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