Juggling Dynamite

When corporations buying back their own shares have become the only net buyers for stocks, you know that we are very, very late in an epic cycle.  And when that buying has been possible only by borrowing suicidal levels of debt to keep the Ponzi-like dream alive, you know we have a contest of greater fools:  those buying the debt and those buying the shares. The bond buyers are throwing good money after bad in desperation for yield, while the corporations are cannibalizing their balance sheet in order to feed a fleeting illusion of rising share prices.  In the end, both are likely to earn what they deserve:  capital losses.  See:  There’s only one buyer keeping the S&P alive.

Prem Watsa of Fairfax Financial laid out similar conclusions in his latest shareholder letter.  The financial-tainers on BNN made note this morning.

Fairfax Financial CEO Prem Watsa laid out a litany of risks in his latest letter to shareholders. From plunging commodity prices, to Canada’s housing market and frantic policymaking in China – he’s telling investors it could all come to a head early this year. Here is a direct video link.

Interesting discussion on Charlie Rose last night on ideas to break political impasse. It is necessary (and healthy) for intelligent leaders to hold, exchange and respect opposing views from those around them.  Intolerance is a sign of weakness not strength.

Former Senators Tom Daschle and Trent Lott discuss their book “Crisis Point: Why We Must—and How We Can—Overcome Our Broken Politics in Washington and Across America.” Here is a direct video link.

500,000 honeybees make the rooftop garden at The Fairmont Waterfront in Vancouver their home from May through September. Introduced in June of 2008, the bees have since increased the productivity of the herb garden with pollination, as well as inspired creative new dishes. Here is a direct video link.