The Best American Poetry

Money, Poetry, and Intrinsic Value

In the course of reviewing books about Warren Buffett, "the business of life," money, and success In The New York Review of Books last month, Sue Halpern writes: "Buffett, it is safe to say, has a different relationship to money than you and me. For us it's a means to an end. For him, it's a vocation. He is called to it. If it's for anything, it's for getting more of. The man is a collector. He just happens to collect dollars."
 
Well, I don't know. It's "safe to say" -- a locution implying that saying the wrong thing will get you punched -- that the famous exchange between Fitzgerald ("the rich are different from you and me") and Hemingway ("yes, they have more money") floats behind the "different. . .than you and me" in the first sentence above. But I still have trouble figuring out who "we" are.  Do you know anyone, even among the poor, for whom money is simply "a means to an end"? Doesn't money almost always stand for something besides money? Status, for example, or achievement. Or security: there's nothing like a million buck in treasuries to give you a warm sense of security. Or shit (see Norman O. Brown). Or manners (see Proust). Seems to me that money is not only Buffett's vocation but his vacation as well. Then there's the idea of collecting. What is the difference between collecting dollars and collecting stamps, art, coins, fedoras, ashtrays? Aesthetics?

Finish this sentence: If the crash of last September has taught us anything, it's --

From the Archives

Here's what we were writing about one year ago today:

Tough Sledding Versus Clear Sailing

Summers fall into two categories for investors: tough sledding and clear sailing. Clear sailing is when things are as they should be: light blue sky, nice little sailboat on Buzzard's Bay, with breeze enough for going out and coming back, the Red Sox are in first place but looking over their shoulders at the Yankees, and you sit back and feel pretty good about your GE, IBM, Johnson & Johnson, Cisco, and Pepsi.

Unfortunately this summer looks like it's the other kind: tough sledding, when despite the summer heat (92 in New York City today) every step feels like your dragging a sled up a snow-filled slope for the thrill of chuting down later as fast as stock prices tumbled last Friday.

Oil prices per barrel and gasoline prices per gallon are still going up, unemployment is up, airlines are up in the air about how to deal with a whole Sunday Times of bad news, the Dow goes down four hundred points and NASDAQ sheds about fifty, and even GM is thinking twice about the wisdom of mass producing the Hummer.

In such a climate it makes sense to own rails, which run on coal and therefore benefit from the travails of the trucking industry. Warren Buffett has bought a bunch of rails including Burlington Northern and Norfolk Southern. Makes sense to me.

Fixing the Financial Mess

A reader asks: What can be done to save the financial system? How seriously should the individual take the national economic crisis?

There are some obvious steps we can take. Many economists agree on these:
-- Banks must lend to individuals or organizations that are good bets to pay back the loan in full.
-- Reasonable collateral must underwrite transactions on derivatives.
-- Underwriting standards should be strenghtened and enforced.
-- Allocate additional funds to FDIC (Federal Deposit Insurance Company) to strengthen confidence in savings accounts.
-- Clarify accounting rules applicable in all states.
-- Reduce the number of foreclosures by restructuring mortgage debt, adopting "rent-to-own" options or whatever it takes.

Our man on the Street has these tips for individuals:

"This is not a good time to quit your job. If you are steadily employed and are eligible for a tax-deferred investment plan for a portion of your salary, maximize it; you get the full benefit of dollar-cost-averaging and you limit your risk, with obvious tax advantages. There are bargains out there right now.
"Sell neither your house nor any blue-chip securities unless you absolutely have no choice.
"If you have credit card debt, pay it off right away. Make that your number one priority. Put yourself on a budget. Treat the while business the way an alcoholic treats the twelve steps: soberly and seriously.
"It is only sensible to proceed cautiously at a time like this, but I would disregard alarmists who tend to extrapolate from current conditions and discount the possibility of change.
"In the short term, be patient. Have confidence. We've been through bad crises before and, if necessity is the mother of invention, we're about due to have some invention.
"Read poetry. It has the best cost-benefit ratio of anything in the culture."

The Financial Crisis

It's easy to get scared when you listen to the talking heads -- and when the Congress (the Republicans especially) so irresponsibly and even irrationally votes down the so-called bailout that, while imperfect, would at least allow us to regroup.

At such a moment it's important to remember these axioms:

1) Financial markets always overreact  and then correct. For example, yesterday's precipitous drop in the Dow (more than seven hundred points) and today's partial recovery (over three hundred points up as I write).

2) Never pull the trigger (or the plug) when markets are in chaos. Better to do nothing. Today is the last day of the quarter, and quarterly statements are about to be issued. You may want to file yours without reading it first.

3) Don't panic. If you are prone to panic, reread # 2 above.

4) History repeats itself -- but always with variations. Despite comparisons to 1929, there are major differences, legal protections in place along with the apparatus to implement necessary regulatory changes  as well as changes in accounting methods to preclude such upheavals in the future.

"Poetry Bailout Will Restore Confidence" [by Charles Bernstein}

Posted today on Harper's:
<<<
From a statement read at an event marking the release of Best American Poetry 2008, held last night at The New School, in New York City. David Lehman is the series editor of Best American Poetry, and Robert Polito is the director of the writing program at The New School.

Chairman Lehman, Secretary Polito, distinguished poets and readers—I regret having to interrupt the celebrations tonight with an important announcement. As you know, the glut of illiquid, insolvent, and troubled poems is clogging the literary arteries of the West. These debt-ridden poems threaten to infect other areas of the literary sector and ultimately to topple our culture industry.
>>>

Click here for the rest of Charles Bernstein's statement.

Charles Bernstein reads at The New School.
Photo (c) Star Black

From Stamps to Money to Manure (and Other News)

Brilliant bond specialist Bill Gross is auctioning off his British stamp collection on October 3 at the Spink Shreves Galleries, according to the Associated Press. Proceeds from the auction, which are expected to approach $1.5 million, will go to a Columbia University project for sending seeds and fertilizer to Africa. Thus does this act of philanthropy recapitulate the inversion of the classic progress of wealth accumulation, the wealth turning instantaneously from money to manure via the laundering vehicle of a major university.

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One of the most startling revelations of recent days is disclosed in  Pre-Game Coin Toss Makes Jacksonville Jaguars Realize Randomness Of Life.

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In other news, the National Endowment for the Arts is funding construction of the biggest or at least the costliest poem in the nation's history, although the newspaper that broke the story -- The Onion -- mis-identifies NEA chairman Dana Gioia (pictured here) as "Mark Barnes" in the caption beneath the photo.

The erroneous caption: "NEA chairman Mark Barnes announces the allocation of $45 million for additional dashes."

Today's Headlines

Rough Road Continues for Lehman [Forbes]

Freaking Out About Lehman [Wall Street Journal]

Time Isn't Lehman's Friend [Business Week]

At Noon: Lehman Tanks [Globe and Mail]

Lehman in Free Fall Again [Fortune / CNN Money.com]

It is better to have loved and lost, we are supposed to believe, than never to have loved at all. Tell that to Lehman. The securities firm has been on a financial yo-yo for months as potential buyers peer in to evaluate an investment, then back away when they get to know the bank a little better. For Lehman, the disappearance of some formerly eager suitors is one more source of pressure.

And the rejections keep piling up for Lehman. Talks about a capital infusion from Korea Development Bank have ended. Lehman, the fourth largest investment company in the United States, “refuses to take what it believes are fire-sale prices for its key assets,” said Roberta Zimmerman of Altar, Wise, Owl, and Light. "Shareholders are depressed."

How do the analysts see it, Charlie? “Analysts concur that LEH is basically in a trading range unless something truly catastrophic happens,” Charlie Gehringer of 2BTV reported outside Lehman headquarters. "It could either work out exceptionally well for investors or very badly."

With each passing day, Lehman’s hunt for a white knight is looking more desperate.

“My guess is Lehman is stuck being Lehman, rather than a domino [the Fed and Treasury] have to prevent from falling,” says George Feiger, president of Contango Capital Advisors, the wealth management arm of Zions Bancorporation.

Lehman declined to comment. “I’d believe no comment would be the best strategy for us,” he told reporters at a venture capital forum, Reuters reported.

The Fallacy of Irreversible Trends

Even experienced stock investors fall for the fallacy of irreversible trends: the assumption that a trend will continue indefinitely.  When the market is going up (as in the late 1990s), people assume it will continue to go up, and that's when speculators enter the scene and even cabdrivers have a hot tip for you. That's the moment to get out.

Right now, because of the glut of overvalued homes, the credit crunch, the mess in Iraq, and the downturn in the economy, most of us assume -- extrapolating from current trends --that oil and gold will keep going up and the dollar will sink to new depths.

But trends are reversible. Change happens, not only because of the implementation of structural improvements but because the stock market reflects not today's conditions but a best-guess estimate of what things will be like in six months.

A correction in the commodity market this past week resulted in oil dropping to $113 a barrel. Nevertheless, Goldman Sachs has forecast a price of $149 by the end of the year. They're the smart guys and what they say will probably happen. So don't see your Exxon or your Chevron just yet.

But keep in mind that the incentive to create a non-petroleum-based energy source has never been greater, and consider this prediction: the liquid natural resource that will prove most scarce in the ninety two years left in this century is likely to be not oil but fresh water.

Water utilities are worth a look, especially those with decent balance sheets offering dividends a point or more above money market rates.

Major Imponderables Loom on the Investment Horizon

Staring today, our principle financial market reporter is, as he puts it, "on hiatus from the Street for two months." Vacationing with his family, he will not be filing during this time. He emphasizes the temporary nature of his withdrawal and denies that it has anything to do with the scary condition of the market and the host of contributing factors -- including the oil crisis, the falling dollar, the continuing credit crunch, worthless mortgages, and corporate downsizing -- that lead many to believe that the recession may be worse than even some bears forecast, with signs of stagflation all around, O dreaded evocation of the late 1970s.

In fact, says our intrepid correspondent (and I quote from his e-mail) there is "bullish sentiment regarding stocks and it is not confined to contrarians. New money is coming into the market, and there is reason to suppose that the second half of the year will be better than the first. If you keep cool and you have capital to risk, now might be the time to pick up one or two of the soundest stocks in the financial sector. You can get them cheap. . . . Energy prices are due for a correction. These things always go in cycles. Major imponderables loom on the investment horizon. Yes, indeed. But was there ever a time when that was not the case?"

Tough Sledding versus Clear Sailing

Summers fall into two categories for investors: tough sledding and clear sailing. Clear sailing is when things are as they should be: light blue sky, nice little sailboat on Buzzard's Bay, with breeze enough for going out and coming back, the Red Sox are in first place but looking over their shoulders at the Yankees, and you sit back and feel pretty good about your GE, IBM, Johnson & Johnson, Cisco, and Pepsi.

Unfortunately this summer looks like it's the other kind: tough sledding, when despite the summer heat (92 in New York City today) every step feels like your dragging a sled up a snow-filled slope for the thrill of chuting down later as fast as stock prices tumbled last Friday.

Oil prices per barrel and gasoline prices per gallon are still going up, unemployment is up, airlines are up in the air about how to deal with a whole Sunday Times of bad news, the Dow goes down four hundred points and NASDAQ sheds about fifty, and even GM is thinking twice about the wisdom of mass producing the Hummer.

In such a climate it makes sense to own rails, which run on coal and therefore benefit from the travails of the trucking industry. Warren Buffett has bought a bunch of rails including Burlington Northern and Norfolk Southern. Makes sense to me.

Our China correspondents say that KFC way outsells Big Macs in China, and China is booming like you wouldn't believe. If you have a few thousand spare dollars you could do worse than buying a few shares of Yum Brands, which owns KFC.

A tip of the old fedora to Bill Gross, billionaire bond fund manager and fellow philatelist, who sold the Scandinavian part of his stamp collection for a cool million, donating the proceeds to a Columbia University project for improving the health, welfare, and education of poor peeople in a wide swath of land encompassing ten African countries.

Here are some stamps not from Scandinavia but from the artist Donald Evans, who specialized in creating the postage stamps of imaginary countries.