Bankruptcies, Depressions and Mark Stanford with his Argentine beauty

Date 02/07/2009

The Right Side

Bill Bonner

Themes: Bankruptcy, Depression, Mark Stanford

Depressions take time. Bankruptcy rates don’t rise overnight. First, it takes businesses a while to realize their sales are falling. At first, they think it might be a fluke. Then, they talk to friends and read the papers. And then, the next month confirms the story.

Then, it takes time for them to react. They have to figure out where they can make cuts. Typically, this involves layoffs and job losses. Employees who will be let go need to be identified. Then, they actually have to be sent home.

Then, the employee collects benefits. He looks for another job. He draws down savings. It takes time for him to react too. He watches. He notices that it is hard to find another job. He realizes his resources are running out. He begins to cut back. Unnecessary expenses are eliminated. Then, he broadens his definition of ‘unnecessary.’

Finally, he lacks the money for the essentials. The mortgage goes unpaid. Credit card deadlines are missed. This provokes an inevitable response – warnings, more warnings, official action, and finally... defaults, foreclosures and bankruptcy filings.

We expect unemployment and bankruptcy filings to edge up throughout the summer months. Then, by the autumn, asset prices should be going down again.

*** We came back to Paris last night to celebrate our 25th wedding anniversary. It wasn’t much of a celebration... just a simple dinner for two in a simple restaurant in the old Palais Royale.

It was a hot day in Paris. We sat outside in the galleries of the old palace. Near to us was another couple. Middle-aged, they seemed like people who were getting together for the first time, not a couple who had been married for a long time. The man reminded us of John Malkovich. The woman? She was not an especially attractive woman, with straight gray/black hair cut as short as a man’s. They held hands. They looked into each others eyes. They seemed to be making plans for a happy future.

When you’ve been married for a long time, on the other hand, you have to wonder if your happiness is not more past tense than future. You can recall the happy times you spent together... how the children were when they were little... how much fun you had when you were poor and starting out in life... and all you went through together to get to where you are now. But when you look ahead, your weary eyes fail. You may feel as though you’ve said all you had to say – and agreed to disagree. You may feel as though the grand adventure of your lives has peaked out – like a bull market – with nothing but the downward slope left for you.

You may feel that the great mystery of coupling has been revealed. Getting to know someone and getting together... even fusing your flesh, blood and spirit to form fully new human beings... is there anything left to discover? Are there more surprises coming?

Inevitably, the conversation turned towards the sovereign state of South Carolina. The poor state has a jackass for a governor. Mark Sanford has become a laughingstock for the entire nation. Not because he had an illicit dalliance and lied about it – who can honestly say he hasn’t done that? – but because he is a cad. And the worst kind of cad – the kind who pretends to be sensitive and caring.

He’s found true love, he says, with an Argentine beauty. But rather than dump his wife and fly to his heartthrob... he dumps the love of his life and tells his wife that he will try to fall back in love with her. The bonehead betrays them all – his wife, his lover... and love itself. He’s even given romance a bad name.

Meeting a woman who looks like Penelope Cruz on a dance floor in South America has an undeniable romantic appeal. When the story broke, there must have been hundreds of lonely middle-aged men in America booking their tickets and looking forward to tango. The Mark and Maria affair might have made the history books of star-crossed love, along with Tristan and Iseult, Antony and Cleopatra, Brad and Jennifer. But now, a week later, we know what kind of man Mark really is. Cancel the tickets. Any man who falls in love from now will feel like a sap.

As for us, we’ve been saps all our lives. Eventually, we’ll head for the romance of Buenos Aires too. But we’ll take our main squeeze with us, just to see what happens next.

To read Bill Bonners article on bank bailouts please click here.

P.S. If you enjoyed this article you can find out more about our free email, The Right Side by clicking here.

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