Saturday Stews

I just made a very delicious vegetable stew/soup with organic vegetable broth, organic diced tomatoes, celery, carrots, garlic, red wine, barley, spinach, brocolli, corn, salt, pepper and cumin. I haven't been cooking much and I haven't been eating very well here. But I just felt the need for some old fashioned home cookin'. Also, I didn't make so much that I would have to eat it for months, just a normal potful of it. Perhaps two or three meals worth.

A different kind of Saturday Stew:

We're in the middle of a collapsing economy. We just elected a new President and lots of people here and all over the world are very excited, but reality is not looking very good for many people who are losing their jobs or are in danger of losing their jobs.

I have worked in the financial services industry for my entire career and I can think of several instances where a basically good, useful, creative idea starts out doing what was intended, but over time, "the smartest guys in the room" morph that idea into something that is over the top, that no longer does what was initially intended, and whose purpose now is only to walk the tax law tightrope and make money for the bankers.

One example is the mortgage loan. In the old days, we saved up our 20% down payment and then borrowed 30 year, fixed rate money. The monthly payment couldn't be more than 25% of take home pay, then it rose to 33% and up and up. Now, the housing market has collapsed. Lenders made loans on terms that didn't make sense, to people who could never pay them back. People without income, without jobs, and with no down payment were able to get loans. Everyone looked the other way and held their noses and signed "liar loans", no doc loans, negative amortization loans, exploding interest rate loans, etc. No one was looking and everyone thought housing prices would continue to rise forever. Wrong. Why would anyone be surprised that this bubble burst?

Another example is the high-yield or "junk" bond, created in the '80s, a time of excess in investment banking. Originally a very smart idea, allowing more companies to access credit markets, it was misused over time, causing billions of dollars of losses, the collapse of companies and jail terms for some of its bankers.

So, here we are with consumers not spending, companies shrinking or closing, people losing jobs, the stock market basically a casino, with program trading and hedge funds causing stocks to lurch up and down like a drunken clown on a roller coaster.

But I have many years of previous economic cycles behind me and so, I can look ahead, knowing that we'll survive this too. As long as I have my health and my family, I'm just fine.