OT: Love in the Time of Sildenafil Citrate

verfasst von Firmian, 19.07.2004, 17:00

-->Love in the Time of Sildenafil Citrate

The Daily Reckoning

Baltimore, Maryland

Friday, July 16, 2004

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*** Richard Russell: more spending, big deficits!

*** Credit ratings at six year high, bond volatility at six
year low...

*** Love in the Time of Sildenafil Citrate...American women, sex,
mature men...and more!

---------------------

Again, nothing.

The Dow sinks - but holds above 10,000. Gold slips...but it
too remains above $400.

But it is summertime; what do you expect? It is a time for
vacations...for light reading...for family cookouts...and
for...? See 'Love in the Time of Sildenafil Citrate"...below...

First, here's Tom with the news:

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Tom Dyson, from the 'Golden Balls' building on London's
Southbank...

-"The credit environment is the best we have seen for
years," bragged Chuck Prince, chief executive of Citigroup,
as the world's largest financial services company posted
another record quarterly earnings yesterday.

- Earnings soared 24% above those of the same period last
year, coming in at a handsome $5.34 billion for the
quarter. Unfortunately, when you're scrutinizing the
accounts of the world's biggest bank, things are never
quite so straightforward.

- First off, there is the $4.95 billion one-off charge to
cover the settlement with WorldCom investors, whose
portfolios took a pummeling when Citigroup recommended they
buy WorldCom shares in a piece of heavily biased research.
"Frankly, [the charge] hurts a bit," said Prince in a
conference call. WorldCom investors, as they look at their
broker statements, might not share his sentiments...

- Next, we see that profits were further boosted by a $350
million release from the loan-loss reserve as corporate
credit quality continued to improve. This bad debt reserve
now finds itself under the 'profit' line on the income
statement. $350 million is not a large sum when viewed in
the context of Citigroup's gigantic balance sheet, but the
message of confidence is clear.

- The banking index has shown remarkable resilience to the
global financial downturn. In fact, the Philadelphia
Banking Index (BKX) is still only 7% off from the all-time
high, hit in March 2004.

- This particular index has not been affected by the bear
market of the last several years and here's the reason:"We
live in the midst of the largest financial bubble the world
has ever known," says the Gloom, Doom and Boom Report."The
credit madness is difficult to comprehend."

- Readers will agree that the figures are simply
staggering."A broad measure of the U.S. money supply, M-3,
rose by $500 billion in the front half of the 1990s, then
accelerated by $2.5 trillion in the back half," continues
Fred Sheehan, writing in the GD&B Report."To keep the
bubble aloft after the stock market debacle, the amount of
money issued from 2000 to 2003 exceeded the entire amount
of currency printed in the history of the United States,
from George Washington's inauguration to 1980."

-"Total credit market debt in the U.S. (government,
corporate, individual) rose from $4.7 trillion in 1980 to
$28.9 trillion by the third quarter of 2001, and hit $33.6
trillion two years later." Today, as was forcibly pointed
out to readers on Monday by the Mogambo Guru, total credit
market debt stands at $34.625 trillion.

- But despite numbers large enough to give even the most
accomplished maths-boffin a headache, the credit circus
rolls on. So far in 2004, companies receiving a credit-
rating up-grade have outnumbered those receiving the down-
grade, reports the FT, for the first time since 1998."A
decline in default rates and strengthening fundamentals
have helped sustain investors appetite for risk," said
Standard and Poor's, the rating agency. Of this year's 22
rising stars, 7 were banks.

- And in another first since 1998, Banc of America
Securities calculates that intraday price volatility in the
Treasury market hasn't been this depressed at any time in
the last six years. The last time traders were so
complacent bonds were about to crash. On that occasion it
was the Russians defaulting on their debt...what will it
take to wake traders from their slumber this time, we
wonder?

- The FT thinks they might have an answer; in an article
entitled"leveraged investors make bond markets ripe for a
fall," they say that the combination of low-volatility
markets, the proliferation of hedge funds, low returns on
equities and depressed credit yields may have forced bond
market traders to crank up their leverage.

- Yesterday, 30-year Treasury yields closed the day at
5.22%, unchanged on the day. 10-year yields added 0.01 to
4.49%.

- Meanwhile, over on Wall Street, stocks were more volatile
than a hotheaded Spaniard in a mid-life crisis. The Nasdaq
opened the day higher but quickly reversed back into
negative territory. Then, after lunch, the bulls
reappeared, pushing the index as high as 1,926 before it
all came crashing back down into the red, for a close of
1,913, and a loss of 2 points.

- Both the Dow and the S&P gave up around half a percentage
point each in yesterday's trade. The Dow closed the day at
10,163 while the S&P fell to 1,107, a 4-point loss.

---------------------

Bill Bonner, back in Baltimore...

*** Consumers are tapped out. Businesses are paying down
debt. What happens next?

Almost every president wants to be a war president, except
for one who has actually been a war president. War gives
politicians an excuse to spend as much as they want...while
vastly increasing their power.

And now...with corporations and consumers cutting back
(they have too much debt)...government spending seems
critical. Richard Russell explains:

"[That] leaves it up to the U.S. government to keep the
economy rolling. And if the government is the savior, that
means that the U.S. government, in order to stave off
dangerous deflation and recession, will have to run
deficits, big deficits, huge deficits, maybe deficits of up
to a trillion dollars a year. Impossible, you say? Hey,
we're running budget deficits of half a trillion dollars
now - and as recently as the year 2000 we were running
budget surpluses.

"So what's the government going to spend the money on? My
thoughts immediately turn to the"Big D" - defense. After
all, who can object to our defending our nation from the
new enemy? Whatever it takes, baby, whatever it takes.

"The US is now fighting two wars, and daily we're hearing
that the nation is under siege with the implication that
maybe World War III is about to start. Believe me, from now
to election time we're going to hear endless talk from this
administration about terrorism, danger, the need for a
bigger military, more ships, more planes, more bodies in
the military. Get ready for code yellow, code red, danger
signals, and increasingly, the need for a major build-up of
the defense system. After the election, if the Bush team is
still in, it would not surprise me to hear more about a
draft. And to be honest, I don't know if it will be any
different if the Kerry team is triumphant.

"This then, is the way the government plans to hold off
deflation and recession. It can all be expressed in four
words - MORE SPENDING and BIGGER DEFICITS."

---------------------

The Daily Reckoning PRESENTS: Bill meets some of his old
buddies and the conversation turns to...women; American
women, sex and Sildenafil Citrate...read on...

LOVE IN THE TIME OF SILDENAFIL CITRATE
by Bill Bonner


"Cling to her. Cling to her."

- Johnny Cash


"I've been using Sildenafil Citrate," said an old friend at lunch the
other day."It really works."

"Well, that stuff from Europe, what's it called, Syalis or
something like that, works even better," said another, even
older friend."I've used them both. You won't believe the
difference."

We are traveling around the U.S., catching up with old
friends. How has the country changed in the last 10 years,
we ask ourselves? What's new?

We are fond, of course, of noticing the madness of crowds;
it is one of our favorite forms of entertainment. Crowds
rush to buy stocks that are too expensive. They drive up
house prices to levels that make no economic sense. And
they toss their hats in the air, celebrating politicians
whom a sensible man wouldn't invite to dinner. Crowds race
from one delusion to another, like passengers on a leaky
barge; the thing is soon swamped by their own enthusiasms.

But individuals have their moments of madness too.

"You remember [Bob]," began another friend over dinner.
"The guy has completely lost it. He sold his business and
divorced his wife. It was amazing. He also moved to New
York and bought a sports car. I'm not kidding. He did it
all. He has a girlfriend half his age. I've never met
her...but people tell me she's a gold-digger. Well, good
luck to her. The way [Bob] is spending money, there won't
be much gold left to dig."

[Bob] is not the only one. Many of our old friends have
found new habits, new lovers...and new lives.

"You think it's just the same old story," our friend
explained."You know, a guy gets into middle age and then
begins an affair with his secretary. Pretty soon, he dumps
his wife. But that's not really what's happening at all.
It's the women who are dumping the men. And then the men
have to figure something out. I think they're desperate.
It's not that they want to go on a diet and start all over
with a 30-something woman. They have to do it. They don't
have a choice.

"There's something about American women. They just don't
want to put up with us anymore...did you know that most
divorces over the age of 40 are initiated by the woman, not
the husband? It's true. I don't know what it is.

"I was listening to an interview with Heidi Fleiss, you
remember her...the Hollywood Madame who ran a prostitution
service? Well, she said some things I thought were very
interesting. She said that most of her clients were men who
had been practically abandoned by their wives. Their wives
just weren't interested in them anymore. She said she
thought she was providing a service, not just for the
husbands, but for the wives too - who didn't want anything
to do with their husbands.

"I know. When I got divorced, I told myself I would never
again get involved with an American woman. They're just
crazy. They're never happy with you, no matter what you do.
It is as if they didn't like being women. It's as if they
think they're supposed to be tough, businesslike and
combative. You can't act romantic around them; they take
you for a fool.

"This is not at all true with foreign women. Not that I've
had that much experience, but I know from my experience
that women from Latin countries are much easier to get
along with. They like being women. They like you to treat
them like women. You don't have to negotiate everything.
And they don't argue with you...they just know how to wrap
you around their little fingers so they get what they want.
Of course...so do you...

"But here in America, after a certain age, women just get
tired of their husbands. They must think they can get
something better but I don't know where they think they are
going to get it. The guy they're likely to hook up with
will be just the same - just as broken down and repulsive."

"Oh, by the way..."

We turned our heads to an attractive young woman who had
joined us for dinner.

"You guys may not realize this, but 'hooking up' has a
different meaning in my generation."

"What do you mean...?

"When kids - or people in their 20s - say 'I hooked up with
so-and-so,' it means they had sex...as in 'I met this great
woman last night...and boom...kaa-ching...we hooked up.'"

"Sounds rather casual..."

"Well, that's just it. It is casual," she continued.
"People in their 20s are not interested in love...or
romance for that matter. They just want to have a good
time."

"I know all about that," replied our friend."My son, who
is only twelve years old, is sending text messages to his
'girlfriends.' You wouldn't believe what they are saying to
one another. It's all casual sex...I don't think they
actually do anything. But they sure talk about it
casually...and explicitly. I was shocked...and I've been
around, you know."

"Well, yes..." the young woman went on."Some kind of
revolution is going on. Young men in their 20s no longer
chase women. They expect women to chase them. They are
completely unable to carry on a conversation...or to say
anything remotely interesting. They just say...'hey, maybe
we should hang out together...and maybe we could hook up
later...'

"Never, ever, would a man in his 20s have the
composure...or the confidence to actually say anything nice
or even something simple such as 'you look very attractive
tonight.' They just can't get the words together.
Everything comes out 'maybe'...and it's all tentative. They
just don't really know what they want. They wait for the
woman to tell them...it's pathetic. Unless they're drunk.
And then they come up and say something in your ear, like
'you're so hot.' Honestly, I'm fed up with men my own age."

"You should consider older men," suggested our friend."You
know, mature men, who know what they want. Men in their 40s
and 50s..."

"Well...hmmm...that's an idea," she agreed, tilting her
head to the left, her dark hair gently sweeping over her
shoulder.

Kaa-ching.

Regards,


Bill Bonner
The Daily Reckoning

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• OT: Love in the Time of Sildenafil Citrate - Firmian, 19.07.2004, 17:00
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