I have previously flagged David Collum’s annual review in this blog. I have just finished reading his review for 2015, which I am now distributing to you.
Collum’s review is subtitled “scenic vistas from mount stupid” and it is dedicated to the “human follies that capture my attention each year.” Investor and blogger Jim Rickards has called Collum’s review “a perfect combination of Mel Brooks, Erwin Schrodinger & Howard Beale.”
I don’t agree with everything that Collum writes; among other things, he has a tendency to find conspiracy in circumstances where I think that good, old ordinary stupidity is a sufficient explanation. But reading his review is always informative and entertaining. I have extracted some of my favorite quotes below, but it is best read in the original and in its entirety. At the very least, I commend the sections entitled “Government,” “The Clintons,” and “Campus Life: the Good, the Bad, and the Ugly.” Since Collum is an academic himself – a professor of chemistry, which is not a hard science like gender studies, but it’s still not bad – his take on campus life is particularly insightful.
“Here we are: ridiculous valuations for the third time in two decades, and
you’ve been warned….The requisite leverage was provided by central banks worldwide. What makes this all so absurd is that there isn’t even a good narrative bias. The 1995–2000 mania was based on a very cool, world-changing tech revolution not unlike the tech revolution of the 1920s. Being duped by the narrative bias was forgivable. The
current global equity run, by contrast, is based on the assumption that a bunch of
second-rate economists (but first-rate bureaucrats) running monetary policy
using third-rate Gaussian models have our backs covered. And get this: they are
going to help us with controlled demolition of our currencies because . . . wait for
it . . . inflation is good, and they know exactly how much is optimal because they are
omnipotent,” Collum giving his views on current asset valuation
“Companies reaching for returns on their cash have found another overpriced investment on which to squander their shareholders’ value—other companies’ bonds. The sellers of these corporate bonds are reputed to be using the proceeds to . . . wait for it . . . buy back shares of their companies! This is financial engineering that would make Escher proud,” Collum on debt-fuelled share buybacks
“Buying gold is just buying a put against the idiocy of the political cycle. It’s that simple,” by Kyle Bass, Hayman Capital Management
“It is said that if you have $10 in your pocket and no debt, you are better off than 25% of adult Americans. Thirty million Americans tapped their retirement accounts prematurely this year. Why? Because 40% of all American households spend more money than they make each month. Fiftyone percent of American workers made less than $30,000 last year. That means that the middle class—more appropriately called the median class—is making $15 per hour. How do you have a financial plan making $15 per hour with a family? Auto loans are soaring, and they are subprime ugly….In short, consumers are broke, and they are going to stay broke. Any Gaussian-driven economist
thinking the rational consumer is still resilient is clueless,” by Collum on the alleged resiliency of personal consumption in the US economy
“Let’s summarize restrictions on cash: We can’t hoard it, withdraw it in big chunks, withdraw it in little chunks except with huge fees, or spend it in significant quantities. Now let me be really clear: Cash is a civil liberty that allows you to maintain arm’s reach from the strong arm of the government. I am willing to share it with the drug lords if need be. I also think those who wish to ban cash are, at best, clueless and misguided. Others are wretched people, fascists, quite possibly treasonous, and definitely worthy of a swift beating. If you douchebags in power force people to go to hard assets to avoid oppression, don’t be surprised if those hard assets include firearms. You are playing with fire,” by Collum, commenting on the current suggestions to ban high-value currency or currency entirely
“Isn’t it funny when you walk into a investment firm, and you see all of the financial advisors watching CNBC—that gives me the same feeling of confidence I would have if I walked into the Mayo Clinic or Sloan Kettering and all the medical doctors were watching General Hospital,” by a senior portfolio manager at UBS
“In the Middle East, the enemy of my enemy is the enemy of my enemy,” by Ian Bremmer, president of Eurasia Group, pointing out the basic fallacy of US policy in the Middle East: there are no guys who wear white hats
“I have to admit that a good deal of what my husband and I have learned (about Islam) has come from my daughter. (As) some of you who are our friends know, she took a course last year in Islamic history,” by Hillary Clinton, explaining the source of the profound understanding of the Middle East that gave the world Libya and Syria
“In the really big folly category, we seem to have populated the Great State
of California during the wettest century in the last 1,200 years: a serious
example of recency bias leading hominids astray,” by Collum, commenting on the California drought, which may not be a temporary problem
“I respect the government only in the same sense that I respect any other dangerous predator who views me as food,” by Will Spencer, who is apparently unknown to everyone
“I will no longer make references to women’s bodily functions. Period,” by someone pretending to be Donald Trump, a quote that was immediately followed by (in something that was likely not a coincidence):
“On some great and glorious day, the plain folks of the land will reach their heart’s desire at last and the White House will be occupied by a downright fool and complete narcissistic moron,” by H.L. Mencken, a visionary who, in a better and more just world, would have lived to see the rise of Donald Trump
“Signs of a Sociopath. *Superficial charm. *Untruthful & Manipulative *Egocentric *Devoid of remorse or empathy *Seeks to dominate and win at all costs *Never apologizes *Expert story teller *Presents him/herself as a hero – with high morals and philosophy *Incites emotional chaos *Feigns like or love to get what he/she wants,” a list that Collum put, for some unimaginable reason, next to a photo of Hillary Clinton
“My wife says I am prejudiced against Hillary (although she is no fan). I say I am well informed. For the first time in my life, I have detested a presidential candidate. Defenders of Hillary and Bill say, “Oh. They are all crooked.” No. The Clintons are grafters of a higher order. Their graft has its own zip code. If you support Hillary on her views, so be it. If you support her just because she’s a woman, you only get one soul and you are about to sell it to achieve a pyrrhic victory in the battle for social justice. And for Clinton detractors, heed the warning of Yoda: “There is another,” by Collum, discussing a presidential election in which we may be given the choice between a narcissistic moron and a sociopath
“The costs are mounting across society. We have an estimated $1.3 trillion dollars of student debt. The majority of it—upwards of $1 trillion—is tied to for-profit institutions whose graduation track record is abysmal. Job placement at graduation is harder to track but rumored to be abysmal,” by Collum, commenting on the coming student loan disaster and proving that he is one of the few academics who would actually be willing to step off this gravy train
“Jake was drunk. Josie was drunk.
Jake and Josie hooked up.
Josie could not consent.
The next day JAKE was charged with RAPE.
A woman who is intoxicated cannot give her legal consent for
sex, so proceeding under these circumstances is a crime.
It only takes a single day to ruin your life.
Think about it! Be responsible,” from an actual poster in a US university, which elicited a comment of “The vilification of the male and infantilization of the female under an otherwise fully symmetric situation is breathtaking” from Collum
“First they came for the Socialists, and I did not speak out— because I was not a Socialist. Then they came for the Trade Unionists, and I did not speak out—because I was not a Trade Unionist. Then they came for the Jews, and I did not speak out—because I was not a Jew. Then they came for me—and there was no one left to speak for me,” by Martin Niemöller, a German pastor who was sent to the Nazi prison camps for his views, reminding us what a slippery slope civil liberties are (and making me think about my own views on this subject)
Roger Barris
Weybridge, United Kingdom