Ah, history......................

 

     Raskob—a hero to the business community and a villain to much of the political establishment and public—planned to use the private dinner to set the record straight; he had no plans to resign from his role as chair of the Democratic National Committee, despite his friend Smith's brutal loss to Hoover.  Instead, Raskob was doubling down:  He planned to promise that he would get the party's finances in order and use his own fortune—estimated to be as much as $500 million—to underwrite the party's fight against Hoover.  That was what the dinner was really about; he wanted the Democrats to spend the next four years single-mindedly and relentlessly attacking Hoover with everything they had.

     Raskob saw his role—and his immense wealth—as the country's most vital counterweight to Hoover.  He believed his money could be used as a political weapon: a way to obstruct the president's agenda, weaken his standing, and ensure he would be a one-term leader.  Raskob considered Hoover a sanctimonious bureaucrat whose meddling and moralizing stood in stark contrast to his own bold, unapologetic faith in capitalism and risk.  But it was more than that, too.  This was deeply personal.  Raskob was not a man accustomed to losing, and his friend's defeat stung.  If Raskob had his way, the Democratic Party would become a well-financed engine of opposition, and a Democrat would be in the White House by 1932.

-Andrew Ross Sorkin, 1929: Inside the Greatest Crash in Wall Street History—And How It Shattered a Nation

Mixed blessings....................?

 

     The legendary Morgan was seventy years old in the fall of 1907, nearing the end of his epic reign.  Founded in 1871, J. P. Morgan & Co. was regarded as the "greatest international banking firm in the world" and "what the business world considered the headquarters of financial power."  No single person in the history of Wall Street had ever wielded more power and influence than J. Pierpont Morgan.  Under his rule, the House of Morgan had helped modernize the American economy, transforming the sprawling hinterland of relatively small companies that characterized nineteenth-century capitalism into the mighty corporate structures that dominated the twentieth century.

-Andrew Ross Sorkin, 1929: Inside The Greatest Crash In Wall Street History And How It Shattered A Nation

the madness of the people................

 

Not everyone was convinced by the rise in the South Sea share price. . . . Sir Isaac Newton, the Master of the Mint, began selling his £7,000 holding of South Sea shares (when asked about the direction of the market, he is reported to have replied, "I can calculate the motions of the heavenly bodies, but not the madness of the people").

-Edward Chancellor, Devil Take the Hindmost: A History of Financial Speculation

Can I get an Amen...........................?

 

Sometimes the best financial plan isn’t the one that looks prettiest on a spreadsheet—it’s the one you’ll actually stick with when real life gets messy. 

-Mark Crothers, extracted from here

abuse......................

 

     History has shown that we shouldn't rely on governments to protect us financially.  On the contrary, we should expect most governments to abuse their privileged positions as the creators and users of money and credit for the same reasons that you might commit those abuses if you were in their shoes.

-Ray Dalio, Principles for Dealing with The Changing World Order

The fifty year mortgage..................

 

Been reading that the idea of a 50-year mortgage is being bandied about.  Lots of commentary about why this is a horrible idea.  The amount of extra interest the home buyer would pay—if they kept the mortgage for all fifty years—over a more traditional loan is staggering.  But, while it is not for everyone, it could have its uses.  It is essentially an interest-only loan.  If your intent is to only live in a place for a few years, and you believe housing prices will still be inflating, then it could be a very viable option.  Just be careful to avoid any pre-payment penalties.  It is certainly not a panacea for the affordability problems we are currently facing.

Bastiat.........................

 

L'État c'est la grande fiction à travers laquelle tout le monde s'efforce de vivre aux dépens de tout le monde.

The State is the great fiction through which everyone endeavours to live at the expense of everyone else.

-Frédéric Bastiat

About interest..................

 

     "The emergency of interest to incentivize lending is the most significant of all innovations in the history of finance," writes the financial historian William Goetzmann.  This point is well made.  Finance allows people to transact across time.  The farmer borrows barley to sow his fields but must wait until harvest before repaying the debt.  Industrial processes—even the light crafts-based industries of the Ancie4nt Near East—require time in production from raw materials to the sale of finished goods.  A text from third-millennium Mesopotamia shows that the preparation of cloth took over a year.  Foreign trade consumes a lot of time.  When capital is tied up in industry or trade, the interest charge bears some connection to the time used in production.

     In any society with private property, whether in Mesopotamia or later civilizations, the payment of interest is required to induce people to lend their resources.

-Edward Chancellor, The Price of Time: The Real Story of Interest

crucial........................

 

Living within your means is a crucial financial skill for anyone.  It is especially valuable to someone who just fell into big bucks.

-Barry Ritholtz

a liberation...................

 

I just find when it comes to your finances, there is a liberation to limiting yourself where defining the things you won’t spend money on, won’t invest in, won’t pay attention to or won’t waste your time on are often more important than the things you will partake in.

-Ben Carlson, as cut-and-pasted from here

Financial advice................

 This was some good father-son financial advice on Landman:

You got two choices in life: Get really good at balancing a check book or make enough money that you don’t have to.

Most personal finance experts focus on the former while most people would be better off striving for the latter.

-Ben Carlson, from this list

My business partner and I decided a long time ago that one of our goals in business was to be able to out-earn our mistakes.  While it may not be a goal everyone would embrace, it's worked for us—so far.

Baby boomers aging...........................?

 

via

and he has a pretty good imagination..............

 I cannot ever imagine a world where economic volatility is tamed and people stop making financial decisions they eventually regret – no matter how much history of past mistakes we have to study.

-Morgan Housel

Blaming the voters...............

 

Congress won’t tackle the debt unless Americans force the issue.

and what are the odds of that happening....

 

We can’t default on government debt unless a crazy politician does something stupid.

Financial rules..........................

 Holding a credit card balance from month to month is one of the worst financial decisions you can make.

The first rule of personal finance is you pay off your credit card balance every month.

The second rule is don’t forget rule number one.

-Ben Carlson, from here

Fun with mergers and acquisitions..........

 

All of these are big serious companies with good lawyers who have written these contracts before. Chevron’s proposed acquisition of Hess is as straightforward as can be, a completely standard all-stock reverse triangular merger; there is no weird structuring here to either get around or trigger the right of first refusal. It’s a simple question: Does the right of first refusal apply to a normal merger of Hess? Exxon seems confident that it does; Chevron and Hess seem confident that it does not.

Weird stuff. I obviously cannot tell you who is right. The language of the Stabroek joint operating agreement is not public, and neither is the arbitration filing, so I don’t know what the contract says, and even if I did I probably wouldn’t be sure what it means. The people who wrote it aren’t sure!

-Matt Levine

Might be why he lives in Omaha..........

 Wall Street’s love affair with this hocus-pocus intensified as the 1960s rolled by. The Street’s denizens are always ready to suspend disbelief when dubious maneuvers are used to manufacture rising per-share earnings, particularly if these acrobatics produce mergers that generate huge fees for investment bankers. Auditors willingly sprinkled their holy water on the conglomerates’ accounting and sometimes even made suggestions as to how to further juice the numbers. For many, gushers of easy money washed away ethical sensitivities.

-Warren Buffett, from this recent letter

I miss these guys.....................

Clark and Dawes with a timeless piece explaining how our financial system "works".

 

We will see..............................

 Debt used to be frowned upon. Now it’s a way of life.

-Ben Carlson, from this post on why he isn't worried about $1 Trillion (in total, not his personally) in credit card debt