Category Archives: stupidity

Interesting times

For some reason, watching the action on the stock markets and so on this week reminds me of September 11, only in slow motion and without the dramatic visuals.  But it’s just as big, just as history-making, and perhaps even more of a disaster.

I actually took all my life savings and plunked them into GICs last December.  The mutal fund advisor thought I was crazy to do so, and showed me some Andex charts of stock performance historically and so forth.  I know how stocks have performed historically, which is why I wanted out.  If you think a big ole’ crash is coming along soon, you get out early and once the dust has settled you wait a while (a longer while than most people probably think) and pick up the bargains that remain for cheap.

I’ve been reading sites like Daily Reckoning and and other bear sites since about 2003 or so. Buffet warned back in 2002 of risky investments like derivatives being financial weapons of mass destruction.  I’ve also been reading up on highly leveraged hedge-funds, the commodities bubble and the reckless lending that’s taken place the better part of this decade.  I’ve been reading about the likelihood of a big meltdown for about five years and wondering if it was imminent for the past year and a half. I don’t blog on the subject much, but have spent a fair amount of time reading up on it.

And yet people still seem to be taken by surprise, or still try to insist that everything is just fine.

I wonder what impact all this will have on the US elections.  One thing that continues to baffle me about American politics is the prevalence among the electorate of the single issue voter. I cannot count the number of times I’ve read people’s comments on various blogs and news articles where they expressed dismay at what Bush has been doing, but still vote for him and his cronies because of their stance on abortion. Or on gay marriage.  Screw the economy, health care, the Iraq war, the national debt, crumbling inner cities and infrastructure, what matters most is whether or not two fags in Vermont can get hitched in front of a civil court judge.  I mean, where the f*ck are people’s priorities?!?

Okay, rant over.  If the US collapse was unable to take the rest of the world down with it I wouldn’t give a crap.  I wonder if the average voter understands how bad this really is, or if they’ve become so accustomed to the doomsaying headlines regarding ‘sub-prime’ and ‘credit crisis’ that they just tune it out. But Lehman isn’t only the largest bankruptcy in US history, it dwarfs the now-second largest Worldcom by a factor of 6 to 1. Even scarier is the increasingly likely prospect of AIG going bankrupt.

Still, I find the unfolding disaster fascinating.  It’s similar to what George Carlin said about coverage of natural disasters. Only there’s no sense of guilt because nobody’s actually dying.  Watching the tickers and the sell-off in the Asian markets last night wasn’t much different than watching the initial reports of an earthquake and wondering how big it will really turn out to be. Will they halt trading tomorrow?  How much more can the Fed pump in? Will AIG be bailed out after all, or will their collapse dwarf that of Lehman?  Who’s next?

“Private Equity” firms were the subject of all kinds of hype as they swallowed up companies through the middle part of the decade, but keep in mind that it was just the old-LBO or leveraged buyout trend that was big in the 80s. Will one of them be the next to blow up? Or perhaps some big hedge-fund bet the wrong way on commodities?  There’s still three trading days to go in this week – until the triple witching hour as they call it, so it should be interesting times.


Loony activist groups – just how low can they go?

I’ve tried to avoid reading anything about the horrific Greyhound bus death. I’ve tried to avoid finding out as few details as possible about it. I can’t imagine what the victims family and friends must be going through or what the victim must have gone through but I’m a strong believer that people inadvertently pushed into the media spotlight should really be left alone and at best anything from strangers should be supportive in order to avoid further victimizing those who are grieving.

Not one, but two notoriously attention-whoring groups have both decided to use this poor young man’s sensationalist death for their own ends.

I wouldn’t say that PeTA reached a new low in attempting to compare his death to the slaughter of animals. However they had already reached rock bottom with their “holocaust on a plate” ad campaign.

The other group, the notoriously anti-gay Westboro Baptists also decided to piggyback on this news item. The connection (if any) that they appear to have been trying to make was even more tenuous than that of PeTA, and their tactics possibly even more appalling. Somehow, in their sick, twisted little heads, this murder was apparently God’s Wrath against Canada’s tolerance of abortion and gays and have decided to picket the funeral.

Each group is exploiting a case that generated international headlines merely to attract attention to themselves and their causes. The problem is there are legitimate concerns for animal welfare, and there are legitimate reasons to oppose abortion, but sensationalist tactics by extremist groups do absolutely nothing to further any cause or stimulate rational debate, but only go to show thinking people what these groups really are.

Both groups at the core appear to be filled with people utterly devoid of humanity. You have to be a complete sociopath to be capable of the tactics that these two groups are using. To use some random, innocent man’s horrific death as a media platform is simply vulgar.

Motorcycles and Religious Freedom

I find whenever there’s a ‘Muslim headscarf’ story unavailable for public outrage a ‘Sikh Turban’ story invariably appears.
This time it’s a Brampton motorcyclist who was ticketed for not wearing a helmet, which, as a Sikh, he challenged as a violation of his religious beliefs to wear a turban at all times. I dunno, last I checked, riding motorcycles wasn’t integral to any religion (remember that ‘Zen’ book was about motorcycle maintenance, not riding per se 😉

Of course, he could always move to New Hampshire with it’s Live Free or Die motto.  According an article in an Indian publication, though oddly enough not mentioned in any Canadian one, turbans may already be worn in lieu of helmets in BC and Manitoba.

The usual arguments for mandatory helmets come down to the usual safety concerns, as well as taxpayers’ money for health costs and so on. At the same time, there is an ongoing serious lack of organ donors.

Since motorcyclists refusing to wear helmets harm nobody but themselves, I don’t think this should be an issue of religious freedom at all. If people don’t want to wear a helmet, that’s their prerogative. Just make them sign an organ donor card first.

Pitbull Bull

Today pitbulls are back in the news. Not a nasty mauling this time, but a constitutional challenge to the current pitbull ban in Ontario.  The dog generating headlines today was born after the ban took effect, meaning that since it was caught by the authorities it will be put down.

Granted, the owner could have been a little smarter by not letting the dog escape in the first place, and also perhaps by picking a better name than “Rambo“.  Something like “Buttercup” or “Daisy” would be more advisable for a dog whose breed has a serious image problem.  After all, part of being a responsible dog owner, which most pitbull owners insist they are, involves not letting the dog get loose.  Ever.

However, that doesn’t make the law itself any less stupid.  A blanket ban on any breed is senseless, particularly when it can include “a dog that has an appearance and physical characteristics substantially similar to any of those dogs” – when “those dogs” include not just pitbulls, but also any sort of Staffordshire Terrier and any old mutt that might have similar traits.

Funny thing about breeds and bans.  When I was a kid in the 70s the breed everyone was hysterical about was the Doberman Pinscher.  I knew several children who’d been badly mauled by Dobermans.  My mother’s dog was viciously attacked by a poodle – the ‘standard’ poodle is actually a large dog, and can be pretty ill-tempered. Not exactly a breed that generates media hysteria however.

A lot of high profile attacks seem to involve one of two things:  a vicious dog that the owner has not secured properly, or a child that is too young to be left alone near any animal.

In England the law – Dangerous Dogs Act 1991 – is even more draconian as it includes not just pitbulls, but also a couple of lesser known ‘fighting dogs’ such as the Argentine Dogo. Over there, Rottweilers seem to generate the most headlines and there are continued calls to add them to the list of breeds to be banned.

Meanwhile in Ontario, Rottweilers seem perfectly uncontroversial. And like any blanket prohibition, rather than single out reckless people, even law-abiding, responsible dog owners are turned into criminals.

I’ve argued this before, and I’ll argue it again.  There shouldn’t be prohibitions on everybody because of the stupidity of a few individuals.

Lotto fraud – a confederacy of dunces

I’ll be upfront: I think playing the lottery is stupid.  That doesn’t stop me from sometimes partaking – I’ll blow an occasional 50 cents on the Ontario 49 or if Lottario goes over 500K I might waste a dollar on a ticket.  I’ve won 5 dollars twice in Lottario and $50 in Ontario 49 so at this point I’ve probably broken even.

Despite full awareness of the miniscule odds of even getting a free ticket let alone millions of dollars, I have always checked the numbers myself.  If not online or on the little ticker that runs on CP24, most retailers have a bundle of tickets that contain the winning numbers right in the blue booth.  I always do the quick pick, so I manually check each number. After all, if I haven’t won anything I don’t see much point in bothering the cashier.  I’ve always thought that those who just take their tickets to the clerk must be pretty lazy.

Those who play the same numbers each week have even less of an excuse.  A quick scan of the winnings numbers – they really aren’t hard to find – and you should be able to tell you’ve won something.

So in some ways it’s a little hard to feel much pity for those who’ve been scammed.  Especially when those doing the scamming are often treated by customers as though they are only one rung up on the social ladder from the homeless guy with the coffee cup sitting outside their store.

At the same time, my work lottery pool typically plays about twenty sets of numbers or so depending on the size of the jackpot.  I’ve stood in line behind others who seem to grab a fistful every week – if they invested that money instead they probably would have been millionaires by now.  Even then I’d still compare at least the first and last numbers to ensure no jackpot was won. Not that I don’t trust my co-worker who manages it, but  I don’t know how thoroughly she checks either.  Nevertheless, society does function best when a certain amount of order and mutual trust is the norm.  And right now, the lottery retail system in Canada resembles that of New York garbage collection in the 80s.

The chief dunce has to be the guy who stole the $5.7million jackpot though.  Not that I’d ever steal that much money (or any money for that matter), but if I were to steal that big a sum I sure as hell wouldn’t be dumb enough to stay in the same city let alone the same country! I suppose if he bought a giant HDTV with some of the purloined winnings he never switched it to the news once in the past year, or perhaps assumed that the Ombudsman would only want to investigate all the other shady retailers out there.

It must take a special kind of arrogance and stupidity to pull the stunt that this ex-store owner is alleged to have pulled.  For a start, if I just had millions of dollars I sure as heck wouldn’t stick out a single Ontario winter.  I certainly wouldn’t be dumb enough to buy a huge freakin’ mansion in the same city.

But I suppose that the people who are not so stupid and arrogant as to do those things would also not try to steal someone else’s jackpot in the first place. No matter how stupid you thought even they were.

Better than a ‘buy nothing day’

I wouldn’t have even been aware ‘Buy Nothing Day’ if it hadn’t been for a couple of misguided friends joining some such group on Facebook. They can be forgiven – having as they do a limited grasp on social organisation and economics.

“Buy Nothing Day” was started many years ago by the ever-sanctimonious Adbusters magazine and passed unnoticed on November 23, buried among stories of crazy “Black Friday” sales and cross-border shoppers.

I’ve always thought the day and the non-publicity stunt to be rather counter-productive if not stupid. In this day of specialisation and division of labour it’s hard to get much of anything done without buying something. There probably are days when I don’t buy anything – but it’s not ever going to be because some group tells me to.

I can understand the desire for something to counter-act the seemingly mindless mass-consumerism that dominates so-called ‘Western’ culture, but is attempting to stage a protest day really an effective means? Adbusters didn’t even attempt to connect their “Buy Nothing Day” with all the toy recalls that have been going on. For a bunch that allegedly worked in the advertising and marketing industry once they certainly missed the boat. Heck, they could have even attempted to fit it into the whole subprime-creditcrunch-commercialpaper-meltdown thingy – but only people who actually understand economics would be able to think of that, I suppose.

What really annoys me is that the purported point is to ‘raise awareness’. Because it implies that it would never occur to me or anyone else that I would reflect on my spending habits if they weren’t around to lecture me about it. I’ve always thought that whole concept of ‘raising awareness’ is profoundly stupid. I remember getting stopped on the street in London one time because a group was raising ‘awareness about racism’. I asked the person if they had any particular goal they were working on and just got more about raising awareness and some sort of ill-defined media campaign – not about any particular issue mind you. I argued that most people already know that racism isn’t a good thing and that those who don’t probably don’t care.  The same goes for consumerism or materialism.

Then there’s the concept of over-consumption. I don’t tend to live an overly luxurious lifestyle by any means but neither do I care how others squander their money. I do sometimes buy things I don’t need; if I’m having a bad day I might indulge in a little pick-me-up and nothing picks me up more than a nice pair of shoes. Except maybe a nice filet mignon.  I sometimes have one glass of wine too many too but I don’t need or want someone else rebuking me for it. The underlying presumption of these ‘buy nothing day’ followers seems to be that they do know just what you need and how much, otherwise you’re a mindless programmed consumerist robot zombie. Takes one to know one.

As much as mindless programmed consumerist robot zombies would make a great B-movie, I do think that most people are capable of making up their own minds and if they aren’t, that’s the business of their lender, not me or some self-appointed bunch of activists.

As for ‘buying nothing’ – the human race is a little over-populated for everyone to go back to farming and making everything themselves. The basis of modern civilization is the division of labour facilitated by the exchange of goods – buying stuff.

The biggest problem with the whole concept is that it is entirely negative. Spending one day buying nothing will prove nothing and will make no point.

My alternative is better: “buy something day”. But not just anything – buy something made locally or something of genuine quality. And not something cheap – something the retailer could actually make money on. Buy a wooden toy or a nice piece of jewelry or a handmade shirt from a local shop. Get some bread from a place that bakes it on site. Buy a specialty cheese from a Quebec dairy or 20-dollar bottle of olive oil.

The best counter-measure to all the cheap plastic crap from China is to start stimulating demand for an alternative: high-quality goods made by skilled and well-paid artisans and trades-people. Pay more, buy less, but end up with something that is just soooo much better.

Bring back Quality. Bring back discriminatory taste and sneering down one’s nose at ‘cheap crap from China’. Bring back the pair of shoes that cost $15o dollars, not because they’re endorsed by some athlete but because they will actually last through the next season. Start up a business that makes only fine hand-crafted goods – the retail version of the slow food movement. Create a website that promotes all the local artisans in each major city. Maybe stagger some sort of cross-country promotion going from one city or town to the next and have it year-round.

Because really, what needs to be counter-balanced isn’t necessarily consumerism or even materialism, but the concept of buying as much crap as possible as cheaply as possible. And that demand for cheapest at any cost is what has lead to the credit crisis, and depressed wages and the countless toy and food recalls not consumerism per se.

But that would take work. It’s a lot easier join a facebook group or send a self-righteous press release through a company called – of all things – marketwire.

‘Investing’ in real estate part II – now it’s just getting stupid

Week-long lineups, fights and a $25 million dollar price tag were all part of the drama this past week as units in the yet-to-be-built 1 Bloor Street East went on sale this week. Damn, I could have skipped work for a couple of days and earned myself an easy two grand to hold the line for some schlump wanting to get in on a place that won’t be ready for at least another three years.

Of course, that was soon bumped off the headlines by this announcement of a new ‘tallest’ condo development, called ‘The Aura’. It’s estimated, according to a Globe and Mail article, that around half the buyers will be ‘investors’. Or as I argued earlier, gamblers and speculators. According to a recent press release sent out by Re/Max, between 60 and 85% of condo sales activity in Toronto is currently attributable to these so-called investors. The most frenzied activity is in the high-end luxury condo market. Each month it looks more like a big ole’ condo real estate bubble to me.

This current mania and all the arguments attempting to rationalise it seem to me little more than the greater fool theory at play.

There’s only so long prices anywhere can rise before people can no longer afford to buy at all, and only so many people stupid enough to buy more house or condo than they can really afford. Parts of the US have run out of such stupid people or the stupid people themselves have run out of credit. There’s been no corresponding run-up in median salaries and now the TSX is getting a little shaky. According to the United Way, 30% of families in Toronto are now living in poverty. Exactly who are these ‘investors in luxury condos’ renting to, or who are the speculators planning on selling to apart from other speculators who are even dumber than they are?

Even the arguments used to justify ballooning prices in other cities (where prices are now falling) can’t be used in Toronto. It’s not built on an island, there’s no mountains nearby and with lots of vacant spaces and brownfields there’s plenty of land to build on, and compared to Miami or Southern California, the climate sucks.

I’m going to be blunt: only a fool would buy a condo in either Vancouver or Toronto right now. Especially as an ‘investment’ property. Toronto is not going to be in a few years how London or New York are now, despite what some people argue to the contrary.

Here’s why: Toronto doesn’t have enough rich people compared to London or NY. Celebrities and other rich folk don’t make this place their second home, and a lot of the capital leaves the city and for that matter the country. If Toronto is “New York run by the Swiss” then the Swiss have really let themselves go; it’s more Birmingham run by the Chinese. Toronto’s left-leaning, woolly-headed city council will never take real steps to stop enabling all the drug-addicted vagrants and vandals that can be found on every single street corner. Or clamp down on all the graffiti and boarded-up, dilapidated buildings. Or balance their budgets.

Toronto’s a very ugly city. It could be beautiful but in the past 60 years or so no one in charge of planning or development has had any vision or aesthetic sensibility. All it could hope for at this point is LED lights on more buildings or to emphasize the bad 60-70s edifices as ‘retro-kitsch’ and try to look even more tacky in a Vegas-style way. Rich people are still going to want to live somewhere that’s nice to look at – something of which there is a serious dearth in Toronto.

There isn’t nearly the volume of tourists that there are in NY or London. And both cities are homebases for lots of rich people. At least for now.

If you don’t believe me, take a walk through Yorkville, which is supposed to be Toronto’s poshest area, and you can see for yourself all the boarded up buildings and empty shop fronts. If there really were so many well-to-do flooding into Toronto there’d be a new designer store opening every week.

As for all the baby-boomers that are supposed to down-shift and move into an urban life-style after decades in the suburbs, I doubt that will happen to the extent that some people expect it to happen. If you’re used to living in a house, moving into an apartment sucks. Especially a one-bedroom apartment, which is what most of the new condos are. Even more especially if it costs nearly as much as your house in the ‘burbs sold for. Even really nice one-bedrooms can feel cramped after a while. Then there’s the noise, the pollution, the traffic, the homicidal taxi drivers and suicidal bicycle couriers. Even the retiring baby-boomers who do move downtown won’t likely last too long.

Part of me wonders if some of these grandiose projects will even end up actually getting built. In case you haven’t read the headlines lately, all the major banks are getting hit by the whole sub-prime crisis in the U.S. So far there’s been hundreds of millions in write downs – and that’s just what they’re admitting to in this past quarter. These developers are just as dependent on credit as their buyers and there’s a good chance that the banks will soon be a lot less generous and a lot more careful who then lend money to.

When there are more people buying a condo because they think the price will increase than there are people buying one because they want a place to live, you know that things are going to get real ugly at some point in the near future. When, is impossible to tell for sure, but things are never ‘different this time’.

I just won’t be there when it happens. We’ve just sold our condo.