This Week’s Episode Of Peter Schiff’s ‘Wall Street Unspun’ – 01-07-2009
Every Wednesday at 8:00pm Eastern (5:00pm Pacific), Peter Schiff broadcasts Wall Street Unspun, which is his mid-week run-down on the market dealing with any issues making the headlines at the time. This week’s episode is one of the best I’ve heard yet, in fact, I think this episode may actually be one of the best talks on the current economic crisis that I’ve ever heard, period. Highly, highly recommended.
Initially, Peter Schiff talks about Barack Obama’s newly unveiled stimulus package. He highlights some obvious holes in that package and uses that as his launching off point. He compares the stimulus package to an individual home owner: Say you’re deep in debt, you’ve lost your job, and you’re generally in the midst of a severe financial crisis, would the solution be to remodel your house? Of course not. Obviously it would be nice to have an updated infrastructure with new roads and bridges, but this is the worst possible time to undertake that kind of activity, since we don’t have the money to do it. Read on for the rest of the episode split into 6 parts:
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The Best Op-Ed Of 2008: Michael Shermer On Free Markets
Michael Shermer is one of my absolute favorite science writers alive today. He’s the founder of The Skeptics Society, the Editor-in-Chief of Skeptic Magazine, writes the monthly Skeptic column in Scientific American magazine, and is adjunct professor in economics at Claremont Graduate University. He’s a phenomenal writer and speaker and a genius mind.
He wrote an op-ed column in January of 2008 called “Why People Donβt Trust Free Markets” which complimented his book, The Mind of the Market, which came out around the same time. The op-ed is fantastic and a required read for all Common Sense Investors, so we’ve reprinted it here in its entirety. Enjoy:
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The Bailout That Broke The Camel’s Back
or From The Prudent To The Profligate: A Nation Of Deadbeats
This is an excellent ReasonTV discussion about the financial bailout and the high level of frustration that the economically literate are feeling in response to it. Tim Cavanaugh has a great line where he points out that the bailout redistributes wealth from “the prudent to the profligate.” And again where he says this bailout was “perfectly designed to punish the just and reward the wicked.”
One of the major issues that frustrates economically minded people is that the media portrays them as ideologically motivated, or worse, unserious when it comes to this bailout. The media has almost wholly supported the bailout from the beginning, and the issue was portrayed by them as the government having no choice but to swoop down and clean up the “market failure” of the private sector; whereas economists and other informed people tried to explain that this bailout was just a poorly designed attempt to stop the free market from naturally adjusting to problem caused mainly by government intervention in the first place.
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Even More Peter Schiff: This Time VS Stephen Leeb
After a short break in the Schiff videos, here’s another where he deconstructs Stephen Leeb’s hilariously off-base comments. Only when it comes to political ideologies can a person be wrong so many times and still keep the same opinion. Remember these videos where Peter Schiff got everything right and his laughing opponents got everything wrong? Or these?
Stephen Leeb just won’t learn.
50th Anniversary of ‘I, Pencil: My Family Tree as told to Leonard E. Read’
Milton Friedman referencing I, Pencil
In the December, 1958 issue of economic journal The Freeman, Leonard E. Read first published his essay I, Pencil: My Family Tree as told to Leonard E. Read. It’s been 50 years since that initial publication, and in celebration of that anniversary, we’ve reprinted the entire essay here, including Milton Friedman’s afterword added in 1976.
I, Pencil is one of the most insightful and important works explaining the necessity of free markets and the impossibility of centralized economic planning. Clearly written and easy to understand, it’s perhaps the most elegantly written essay on how market economies work. Long before much work was done on complex adaptive systems, Read explained them perfectly. It’s required reading for all Common Sense Investors.
Read on:
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Why Bernie Madoff’s Scheme Proves We Must Abolish The SEC
In the wake of the largest swindle Wall Street has even known, everyone is questioning how this could have happened. How could anyone run a 50 billion dollar Ponzi scheme right under the SEC’s nose? The SEC, with virtually limitless resources, has the power to do essentially whatever it wants when investigating fraud. So how could they miss this? Is this just a failure of the free market, an example that those hedge funds just have too much freedom, and government regulators need more power and resources? Not at all – in fact, quite the opposite.
This is a wake up call for investors and the public. Where the SEC failed to spot a problem, the free market saw it. Eighteen months ago, a firm named Aksia run by Jim Vos and Jake Waltour, warned clients not to do business with Bernard Madoff’s investment fund. Aksia is what’s called a due-diligence firm, and they’re an example of what regulation would look like in a true free market.
Because of the lack of government regulation in hedge funds, these due-diligence firms emerged. Investors wanted to be assured that their money was going to a reputable fund, so these companies thoroughly investigate hedge funds for a fee.
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Always Relevant Investment Advice
This is a classic sketch from Saturday Night Live with timeless financial advice. Common Sense Investors, take note.
Great Ideas: Where The Buffalo Roam… And The Wind Turbines Spin
There are some solutions that will probably never become a reality, but you just have to push them, get them out there, make sure other people at least hear them. That’s how I feel about the Buffalo Commons. Imagine the world’s largest nature reserve, where massive herds of wild buffalo could migrate across the plains the way they used to, uninterrupted. And imagine that same land had a environmentally safe, completely non-polluting energy source collecting power 24 hours a day 7 days week. That’d be pretty rad, and it seems like most people would be for it. Well it can happen, check it out:
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Detroit Is Between A Rock And A Hard Place
I haven’t said much about the whole Detroit automotive financial fiasco here, instead I posted most of my opinions about it over at Ridelust.com. Just the other day, I wrote a post called The 9 Detroit Auto Brands We’d Miss The Least that basically outlines which brands GM and Ford should sell to lighten up their load and get back on track financially.
Remember the story of Aron Ralston? He was the climber who was out in the wilderness when a boulder fell on his arm and pinned him there. He was stuck, unable to get free, so he did what needed to be done, he cut off his own arm. That kind of action takes massive testicular fortitude, but it saved his life in a case where, otherwise, he would have surely died. What does this have to do with Detroit? Well, right now, GM owns 12 different brands: Buick, Cadillac, Chevrolet, Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn, and Vauxhall; Ford owns 5: Ford, Lincoln, Mercury, Mazda, and Volvo; and Chrysler owns 3: Chrysler, Dodge, and Jeep. All three companies are on the verge of certain death, and something needs to be done. The question is, do they have the testicular fortitude that Aron Ralston had? Here’s a quick run down of which brands I think should go the way of Aron Ralston’s arm:
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Wal-Mart Employee Crushed To Death By Black Friday Shoppers
In a surreal scene of consumer frenzy this morning, a Wal-Mart employee in suburban New York was crushed to death by a wave of shoppers who broke down the doors just minutes before the store was set to open. It was 4:55 am when the sliding glass doors finally came off their hinges due to the weight of over 2,000 holiday shoppers. As they piled into the store, 34-year-old employee Jdimypai Damour was knocked to the ground and trampled to death. No one stopped to help, not even when police arrived. The officers giving Damour CPR were being shoved and jostled around by shoppers trying to enter the store themselves.
“They were like a stampede,” said Nassau Det. Lt. Michael Fleming. “Hundreds of people walked past him, over him or around him.”
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