Previous Columns
8:30 AM EST, Wednesday, October 10, 2007: This is great. The more I write about the need to be cautious, the higher the market goes. Not good to believe a word I write. Despite that, I remain a genius. Every one of my Australian mining picks are up -- and all up much above what I paid. The stocks are BHP, RIO, KZL, ZFX, MRE, OXR, AXM, WSA and MEE. Kagara is my favorite. Its latest September quarterly report is out, showing record everything. I love this quote, "Thalanga drilling returns results of up to 14.9 metres at 17.5% zinc, 1.6% copper, 5.1% lead, 121 grams per tonne silver and 0.66 grams per tonne gold." Thalanga is in Australia somewhere.

The best cheap headphones ever. I love my iPod, but I hate its earphones. I've tried zillions -- expensive and cheap. But they fall out or off, or are too big for travel. I picked this pair up at CompUSA for $19.99. They're small, portable, sound fine and don't fall off or out. They're perfect. But Amazon has them cheaper at $15.21. Click here.

Sony MDR-Q22LP w.Ear Headphones. They come with caps you can change. It makes sense to have blue on your right ear and silver on your left. That way you know which ear is which.

In Bernanke We Trust: I don't like all his stock picks (you have to develop selective hearing) and sometimes his histrionics bore me. But I do like Jim Cramer's writing. He's a reporter at heart. And he knows Wall Street. Here's his latest piece from the New York Magazine. There are some really funny bits, including the crack about President Bush's sunny outlook:

Talk about pressure! Talk about crummy timing for a book tour! Two days before the most important Federal Reserve meeting in a decade, Ben Bernanke, the rookie Fed chairman, had to listen to the national icon, his predecessor, Alan Greenspan, hawk his new book, The Age of Turbulence, in virtually every venue on earth, replete with a main story line about how great he is and how clueless everyone else is about monetary policy in the United States.

The last thing Bernanke—under intense pressure to slash interest rates to save the credit markets—needed to hear was the Oracular One talking about how reining in inflation with high interest rates is job number one for whoever sits on the Fed throne, and how Greenspan deserved immense credit for doing just that. Maybe Greenspan accomplished what he wanted—a spit-polished legacy, the top spot on Amazon, and a huge boost to his consulting business—but he cast an avuncular shadow so gigantic and dark over the new guy that it’s a wonder Bernanke could even find his way to the Federal Reserve building for last Tuesday’s meeting.

Could it be that Bernanke had the former Fed chief’s 60 Minutes interview on mute? Or maybe Bernanke realized the true gravity of what was shaping up to be the worst credit crisis since Citigroup almost went belly-up in 1990 and chose not to heed the long-term advice of the sainted one. Whatever the reason, the rookie shook off the Greenspan shroud and hit the ball out of the park with a fat half-point cut in the federal funds rate. Because of Bernanke’s bold move—the half-point cut was twice as deep as most Fed followers, including yours truly, who had been a vocal critic of the Fed’s stewardship, had expected—I’m now confident that what would have been a given in 2008, a brutal recession that started with housing but was spreading, Ebola-like, to the rest of the economy, will now be avoided and prosperity assured. What a save!

What was Bernanke saving us from? What caused the mess that forced him to take drastic action, not one of those itty-bitty quarter-point interest-rate jobs? How about a chaotic, frozen, dysfunctional economy fueled by defaulting mortgages based on irresponsible teaser rates that his predecessor pushed hard and often for every prospective home buyer to take, including those who could ill afford them? Where’s that in the book? And then, after hooking millions of unqualified buyers to take low-interest teasers that would reset in two years, Greenspan gaffed the borrowers with fourteen straight interest-rate hikes that put the reset mortgage rates out of reach for all but the wealthiest. Those vicious and, I believe, foreseeable resets—foreseeable if you are going to set the rates, as Greenspan did—are causing a national wave of defaults the likes of which haven’t been seen since the Great Depression. And why did Mr. Prudent champion these reckless teasers almost as heavily as the endless Ditech and Countrywide television pitchmen who buried us in these adjustable-rate nooses did? Because he needed to work his way out of the dot-com crash by stoking the housing market. And what had caused the dot-com bubble? That would be the low margin rates that fueled ridiculous speculation in junk stocks—rates controlled by, you guessed it, our lovable hero, Alan Greenspan. At any given time the author of The Age of Turbulence could have prevented, well, the Age of Turbulence, by simply raising margin rates, by discouraging the use of exotic teaser mortgages, and by encouraging regulations that would have ended the travesty of giving money to speculators to flip houses. But Greenspan, an acolyte of libertarian Ayn Rand, disdains regulations. Instead, he seemed to like the power and mystery of endlessly taking rates up and down, disrupting the whole economy instead of managing discrete stock-market or house-speculation bubbles. Just a little regulation could have avoided both of those bubbles, with no need to overstimulate and then wreck the overall economy with crushing rate increases like the ones with which Greenspan stuck Bernanke.

Bernanke wasn’t just up against Greenspan’s blinding halo last week. He was also up against President Bush and the man in charge of Bush’s management of the economy, Hank Paulson. Despite the record mortgage defaults, despite more than 100 mortgage brokers’ going under, despite multiple bailouts of the largest lender in the country, Countrywide, and despite an actual loss of jobs in August, Bush and Paulson on virtually every occasion trumpeted that the “fundamentals are sound.” That bullish claptrap put Bernanke in the incredibly awkward position of having to cut rates even as the president and his Treasury secretary proclaimed boom times. Blessedly, Bernanke, after a slow start during which he hiked rates himself only to have to flip-flop when he saw the possibility of runs on banks in this country and no credit to buy almost anything larger than a shanty, managed to shake off the Hoover-like assurances of the president and the Treasury secretary and recognize that the fundamentals were anything but sound.

I’m not surprised by President Bush’s sunny economic outlook—this president would praise the Weimar Republic’s hyperinflation as great for Home Depot and the wheelbarrow industry. But Hank Paulson? I expected better from the ex–Goldman Sachs chief. One of the few honest-to-Betsy revelations in The Age of Turbulence was Greenspan’s acknowledgment that the position of Treasury secretary, once a post for the best and brightest businesspeople and economists, has under Bush been reduced to nothing more than White House water boy for the “fundamentals are sound” mantra. The previous holders of the position, Paul O’Neill and John Snow, were either lightweights or totally useless housemen, unwilling to speak up beyond the party line on anything, whether it be ballooning deficits or reckless home lending. I had hoped that Paulson would be like Bob Rubin and Larry Summers, Treasury secretaries under Clinton whom Greenspan correctly praises in Turbulence for being anything but yes-men, for offering creative solutions that solved most of the nineties’ economic problems. Paulson had the stature and experience his Bush-administration predecessors lacked, and for a change could actually think and talk independently from Bush propaganda. Or so I thought. But the sole sour note I have heard from his office is from his undersecretary for domestic finance, Robert K. Steel, who had the horse sense to admit in front of Congress that we have a real housing-finance problem in this country that won’t go away by itself. Throughout this period of intense turmoil behind the scenes at places like Bear Stearns, Morgan Stanley, and Goldman Sachs (which Paulson ran), we never heard a peep out of Paulson that anything was awry. Who would have ever thought that Paulson, a coldhearted, some would say vicious, realist at Goldman, would become one more pol in what used to be a distinguished office?

It would have been terrific had Bernanke been able to break the boom-bust rates cycle that Greenspan fostered in the past decade. It would have been spectacular if the fundamentals were sound and Bernanke didn’t need to do a thing. Unfortunately, Bernanke’s got to clean up the turbulence left by his predecessor. With any luck, this time the Fed chief won’t have to cut too much further and we can get what is ultimately desired: a Fed that does no widespread tinkering and just suggests limited regulation—or regulates—when a market gets out of line.

Tell me about George Bush: I have a secret. I voted for George Bush the first time. So did my very good friend and successful investor/businessman, Dan Good. Dan is also ultra-conservative, disdainful of left-wing causes and an unbeliever in climate change. He and I disagree on many things. Yesterday, he emailed me (and his 1,000 closest email buddies), his latest analysis of Bush. I keep away from politics. But Dan's piece is good analysis:

Bush is a good man, sincere and smart. But he has a dominating naive dimension and is more black and white than gray. He can't deal with nuance and sees the world through a benevolent Christian lens. He lacks a deep understanding of vicissitudes and varieties of human nature and cultures which has led to a misreading of the Iraq situation and probably of the entire Middle East. A case in point, is the late revelation about the importance of tribes and sheiks in Iraq. It wasn't so much that Bush and his advisors weren't prepared for the War's aftermath, it was that they naively prepared for the wrong outcome.

The Neocons ( not meaning only conservative Jews but more broadly speaking, including Rumsfeld) published their now famous paper in the late nineties about how to deal with the growing threat of terrorism and Bush took this as gospel. It was in response to what the group perceived ( and rightly so) that the Clinton Administration was ineffective in dealing with the current and present terrorist danger and was actually reducing our capability to confront it effectively (witness severe reductions in funding for the military and intelligence communities during his terms). Their policy manifesto was really more an outline for war, than a roadmap on how to realistically deal with the consequences of action. Bush was intrigued with these ideas and when he won in 2000, they were recruited and went into action. They probably could have been contained had 911 not occurred, but they were unleashed when it did. In deference to them, a mighty war machine, technology based, was created and put to work. We know the outcome and its successes but the aftermath it created has been a disaster. We are only now starting to understand the cultural problem and complications and luckily, perhaps, some insightful people are now emerging as influential.

Bush has no choice but to pay attention to them and relegate his basic instincts to the second chair. It might make good copy in the liberal media to conjure up all kinds of reasons for past mistakes (Chalabi being one), but the fact remains that we've got to realize that good intentions notwithstanding, we cannot forcefully impose our views of freedom and democracy on the world, particularly in a condensed time frame ( an eight year term) as the world is a kaleidoscope of cultural attitudes towards life (and death) and will chart its own future course. We can be helpful and hopefully persuasive directionally with regard to human rights, and to also carry a big war stick so as to mitigate future human disasters, but we need an enlightened policy group and new faces to lead the Government as well as the world.

Now, print his out, take it to Starbucks and they will give you a free coffee (after you also give them five bucks).

More Great quips from the old Hollywood Squares
Q. As you grow older, do you tend to gesture more or less with your hands while talking?
A. Rose Marie: You ask me one more growing-old question Peter, and I'll give you a gesture you' ll never forget.

Q. Charley, you've just decided to grow strawberries. Are you going to get any during the first year?
A. Charley Weaver: Of course not, I'm too busy growing strawberries.

Q. It is considered in bad taste to discuss two subjects at nudist camps. One is politics, what is the other?
A. Paul Lynde: Tape measures.

Q. During a tornado, are you safer in the bedroom or in the closet?
A. Rose Marie: Unfortunately Peter, I'm always safe in the bedroom.

Q. According to Ann Landers, is there anything wrong with getting into the habit of kissing a lot of people?
A. Charley Weaver: It got me out of the army.

Q. Back in the old days, when Great Grandpa put horseradish on his head, what was he trying to do?
A. George Gobel: Get it in his mouth.

Great news. Only the Goyim are affected:
Two Jewish ladies meet on the street. Ruth says to Golda, "Such news I got for you, Golda!

"My Irving is finally getting married. He is engaged to this wonderful Jewish girl, but the poor darling has some strange illness called herpes."

"Ruthie, do you have any idea what is this herpes. Can our Irving catch it?"

Ruth answers, "God forbid! It's past time he's settled with a nice Jewish girl. As for herpes, who knows?"

"Well," Golda says, "I have a fine medical dictionary. I'll run home and call you right away."

Golda goes home, looks it up, and calls Ruth excitedly, "Ruth! Ruth! Thank goodness. Not to worry! It says herpes is a disease only affecting the gentiles."

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. Thus I cannot endorse any, though some look mighty 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 Claire's law school tuition. Read more about Google AdSense, click here and here.
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