Incredible Wisdom from Charlie Munger
The following article by Berkshire Hathaway's #2 Charlie Munger is pure artistry, and will become a legendary contribution to the common understanding of our economic plight as it unfolds.
The article was featured Sunday on Slate.com, and is a nice boon for them. I don't see that any CAPS boggers picked it up, so give it a read if you haven't already.
It's sobering title: "Basically, It's Over"
In it, he blasts the derivatives market as the grand casino that it is.
This is an incredible passage ["Good Father" = Volcker]:
The views of the Good Father drew some approval, mostly from people who admired the fiscal virtue of the Romans during the Punic Wars. But others, including many of Basicland's prominent economists, had strong objections. These economists had intense faith that any outcome at all in a free market—even wild growth in casino gambling—is constructive. Indeed, these economists were so committed to their basic faith that they looked forward to the day when Basicland would expand real securities trading, as a percentage of securities outstanding, by a factor of 100, so that it could match the speculation level present in the United States just before onslaught of the Great Recession that began in 2008.
It's a parable, and it ends:
"As it worked out, the politicians ignored the Good Father one more time, and the Basicland banks were allowed to open bucket shops and to finance the purchase and carry of real securities with extreme financial leverage. A couple of economic messes followed, during which every constituency tried to avoid hardship by deflecting it to others. Much counterproductive governmental action was taken, and the country's credit was reduced to tatters. Basicland is now under new management, using a new governmental system. It also has a new nickname: Sorrowland."
Coverage of the article is already appearing, and I think this will mark a recognizeable rung in the ladder toward broader public understanding of our likely economic scenarios.
Send it to your friends and family ... ask them what they think. What do you think about this article? Do you find it unsettling given the source? I would really like to have the pulse of CAPS in this one.
Remember, it comes on the heels of this hard-hitting satire from theonion.com:
U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion