Previous Columns
9:00 AM EST, Tuesday, March 10, 2009. Since Barack Obama took over as president, the stockmarket has fallen by by 21%. I am not blaming him. But it does suggest that the crowd is voting thumbs down to his Bailout Plans and his hiring of people -- like Summers and Geithner -- who are working with some strange assumptions and spending vast amounts of your and my money.

I'm no expert. But it seems to me that far more effort and money ought to go into helping people -- saving their houses and their jobs (helping them get retrained, etc.) than saving companies that caused all the mess. I don't think Obama is a socialist. But I think some of his misguided policies will extend this recession. People are now arguing another three years. I can see five years.

The IRS rules on training are all wrong. Here are words from an 86-page document called "Tax Benefits for Education for use in preparing 2008 returns."

You can deduct the costs of qualifying work-related education as business expenses. This is education that meets at least one of the following two tests.

+ The education is required by your employer or the law to keep your present salary, status, or job. The education must serve a bona fide business purpose of your employer.

+ The education maintains or improves skills needed in your present work.

However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it:

+ Is needed to meet the minimum educational requirements of your present trade or business, or

+ Is part of a program of study that will qualify you for a new trade or business.

In short, if you're a Detroit car maker and go to air conditioning school, you can't deduct the cost of your education for your new work. This sucks big-time. This is stupid.

Buffett is not positive: Buffett did a really interesting interview with CNBC yesterday. Two things that he said stuck with me: the economy has fallen off a cliff and people had just stopped spending -- in a way he had never seen. He criticizes the administration, calling its policies muddled and needing serious clarification. Remember Buffett was an adviser to Obama before Obama became president. (I'm guessing they've not spoken since. Which is dumb.) The Buffet interview is worth watching. Be patient. You may have trouble getting on. CNBC's web site was overwhelmed this morning.

Talking about misguided government policies. Maria Bartiromo interviewed Jim Rogers, the commodities enthusiast, in last week's BusinessWeek.

He's very critical of the administration. His criticisms are right on. The interview:

Jim Rogers Doesn't Mince Words About the Crisis
In 1970 a young Wall Streeter named Jim Rogers hooked up with George Soros to start the legendary Quantum Fund. The ensuing decades have seen Rogers build an iconoclastic career as an author, adventurer, and creator of the Rogers International Commodities Index. And throughout, Rogers—now based in Singapore—has remained an outspoken global investor. Today is no different. He has harsh words for former Fed Chairman Alan Greenspan, suggests President Barack Obama and his economic team are not up to the task, and thinks tough love is the answer for America.

MARIA BARTIROMO: What do you think of the government's response to the economic crisis?

JIM ROGERS: Terrible. They're making it worse. It's pretty embarrassing for President Obama, who doesn't seem to have a clue what's going on—which would make sense from his background. And he has hired people who are part of the problem. [Treasury Secretary Tim] Geithner was head of the New York Fed, which was supposedly in charge of Wall Street and the banks more than anybody else. And as you remember, [Obama's chief economic adviser, Larry] Summers helped bail out Long-Term Capital Management years ago. These are people who think the only solution is to save their friends on Wall Street rather than to save 300 million Americans.

So what should they be doing?

What would I like to see happen? I'd like to see them let these people go bankrupt, let the bankrupt go bankrupt, stop bailing them out. There are plenty of banks in America that saw this coming, that kept their powder dry and have been waiting for the opportunity to go in and take over the assets of the incompetent. Likewise, many, many homeowners didn't go out and buy five homes with no income. Many homeowners have been waiting for this, and now all of a sudden the government is saying: "Well, too bad for you. We don't care if you did it right or not, we're going to bail out the 100,000 or 200,000 who did it wrong." I mean, this is outrageous economics, and it's terrible morality.

You have said Bear Stearns and Lehman (LEHMQ) would still be around if Greenspan hadn't bailed out Long-Term Capital Management in 1998. Can you explain?

Well, if Long-Term Capital Management had been allowed to fail, Lehman and the rest of them would've lost a huge amount of money, their capital would've been impaired, and it would've put a terrible crimp on Wall Street. It would've slowed them down for years. Instead of losing capital, losing assets, and losing incompetent people, they hired more incompetent people.

Should AIG (AIG) have been allowed to fail, too?

First of all, banks and investment banks and insurance companies have been failing for hundreds of years. Yes, we would've had a terrible two years. But you're dragging out the pain. We had 10 years of the worst credit excesses in world history. You don't wipe out something like that in six months or a year by saying: "Oh, now let's wake up and start over again."

What about Citigroup (C)? What about the car companies?

They should be allowed to go bankrupt. Why should American taxpayers put up billions to save a few car companies? They made the mistakes! We didn't make the mistakes! I'm sure they'll give them the money, but I'm telling you, it's a mistake. It's a horrible mistake.

I totally understand what you're saying, but the banks are under massive pressure.

They all took huge, huge profits. Who was the head of Citigroup? Chuck Prince? I mean, how many hundreds of millions of dollars did Prince take out of the company? How many hundreds of millions of dollars did other Citibank execs take out of the company? Wall Street has paid something like $40 billion or $50 billion in bonuses in the past decade. Who was that guy who was the head of Merrill Lynch (MERR)?

Stan O'Neal?

Right, Stan O'Neal. He got $150 million for leaving, even though he ruined the company. Look at the guy at Fannie Mae (FNM), Franklin Raines. He did worse accounting than Enron. Fannie Mae and Freddie Mac (FRE) alone did nothing but pure fraudulent accounting year after year, and yet that guy's walking around with millions of dollars. What the hell kind of system is this?

Are you worried the economic crisis will lead to political turmoil in China and elsewhere?

I absolutely am. We're going to have social unrest in much of the world. America won't be immune.

What does all this mean from an investment standpoint?

Always in the past, when people have printed huge amounts of money or spent money they didn't have, it has led to higher inflation and higher prices. In my view, that's certainly going to happen again this time. Oil prices are down at the moment, but that's temporary. And you're going to see higher prices, especially of commodities, because the fundamentals of commodities are enhanced by what's happening.

Which commodities are worth buying or holding on to?

I recently bought more of all of them. But I really think agriculture is going to be the best place to be. Agriculture's been a horrible business for 30 years. For decades the money shufflers, the paper shufflers, have been the captains of the universe. That is now changing. The people who produce real things [will be on top]. You're going to see stockbrokers driving taxis. The smart ones will learn to drive tractors, because they'll be working for the farmers. It's going to be the 29-year-old farmers who have the Lamborghinis. So you should find yourself a nice farmer and hook up with him or her, because that's where the money's going to be in the next couple of decades.

My old commodities fund?. It's down 9% so far in 2009. Fortunately, I got out a long, long time ago.

There are too many shops. Too much stuff no one needs. And too few people to buy it all. Whether Marshalls or whomever, they all look alike. Acres of cheap junk. I went shopping with my wife yesterday. She shopped. I took pictures and asked questions, like, "Why are you buying that junk? Do you really need it?"

I heard two legitimate reasons for buying: "My guests keep stealing our padded coat hangers." "The kids need bigger shoes."

Discount shopping must be a sport, or an antidote to boredom. Why else would three people drive some of the world's most expensive cars to a discount mall?

Look carefully. You'll see a Mercedes SL550, a Jaguar XK and a Lexus SC430.

These were the nice people shopping for padded coathangers, which their guests kept stealing. He's in cash and doesn't think stocks are coming back any time soon.

I can't imagine anyone buying these ugly shoes. I guess next week they'll get cheaper, and cheaper. Is this what the economists call deflation?

I went looking for the one thing that summarized "excess." It wasn't cheap, ugly shoes, 25 feet of underwear in size 40 or this wonderful jacket:

I found it in something called Lucas muecas.


Lucas muecas is "lollipop chamoy flavored with chilli powder." Now I've found it, my life is fulfilled. How could I resist it for 49 cents? I haven't opened it. I don't want to hurt the wonderful packaging. It's for my mantlepiece.

A truly inspirational Story
Recently I was asked to play in a golf tournament.

At first I said, 'Naaahhh!'

Then they said to me 'Come on, it's for handicapped and blind Kids.'

Then I thought... I could win this!'

Saving money
Mother had decided to trim her household budget wherever possible, so instead of having a dress dry-cleaned she washed it by hand. Proud of her savings, she boasted to my father, "Just think, Fred, we are five dollars richer because I washed this dress by hand."

"Excellent," my dad replied. "It's a recession. Wash it again!"

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.