Richard Russell on Obama

Once in a while I am fortunate enough to have someone send me Richard Russell's enlightened missives. This was one of those days, and I will share with you his wisdom. Keep in mind he was an Obama supporter before the election, and he is saying we are in a primary bear market. His best guess when the bear market will end? With a share of the Dow Jones buying one ounce of Gold (i.e., the Dow at 3500, gold at $3,500).

The US is now in the business of doing everything vs. not doing anything. I don't know whether the current policy of shoveling out money to everyone -- dying corporations, slumping industries, collapsed banks, inefficient businesses, will work. Personally, I doubt it. But the Obama people want to look "busy," they want to look as though they are addressing the nation's severe problems as opposed to sitting on their dead asses.

I disagree with the Obama policy. Bear markets exist for the purpose of correcting the faults and scams and greed and inefficiencies that grew out of the preceding bull market. That's not what's happening in the US now. The losers and inept are being saved with massive infusions of cash. Bank presidents who allowed their banks to load up with fraudulent mortgages are given bonuses, corporations who couldn't learn to compete are being saved from bankruptcy, executives whose stocks are in the single digits are being rewarded and given outrageous golden parachutes or monster bonuses. Where's the accountability?

And what about the inept SEC which ignored report after report on Bernie Madoff's massive fraud? Was anyone at the SEC fired? Was anyone responsible at all? Where's the damn accountability? I say "Let the bear market have its way." A bear market has a way of cleansing the economy. It's called "firing" or "bankruptcy."

I have a sinking feeling that the current policy of "holding everything up," not allowing the bear to do its work, is going to backfire. The Law of Unintended Consequences is going to come to the fore. I'm not going to guess at what the unintended consequences might be. But I will venture a guess -- the unintended consequences will not be good. They'll be a bloody disaster.

We inhale and we exhale. The market turns bullish and the market turns bearish. Night follows day follows night. It's nature. The market is made by men and women, and normally the market inhales and exhales (rallies and declines). To try to interfere with the primary trend is to go against nature. The end result will not be good.

The market is severely oversold. Recently, every rally in the market has been met by insistent sellers. The people want OUT, and every rally affords them another chance to get OUT.

Richard lived through the Great Depression and WW-2. He sometimes shares a story from those times, and here is one of them, definitely worth a read:

Amid all the current chaos and anxiety, my tired mind travels back to my life 62 years ago in romantic Europe.

A day in the sun -- It's a bright sunny day in Italy. It's February, 1945. The Colonel pulls back the flap, and steps into our tent. We're in our thick blanket-rolls snoozing and having happy dreams of home -- me, my pilot and my co-pilot. Our enlisted men -- our engineer gunner, our radio gunner and our tail gunner are sleeping inside a battered, bullet-riddled building near by. The Colonel snaps, "Rest, stay where you are." My pilot, Art Herron, rolls over, reaches for a beer (hidden under his cot) and lights a cigarette. He's a beer and butt addict, he can't function without them. I'm already standing and worrying, I'm the chief worrier on our crew. The Colonel starts, "I don't have any formal missions for you gentlemen today. But I want you to head north over the water, and see what you run into. You'll see a lot of those little sailboats with those bright-colored sails. Any large boats that could be Italian or German, take them out. Stay low, and be damn careful over the water, you know how deceptive water can be. You hit it, your props bend, and you're down -- it's like hitting cement."

We're all out of bed and starting to put on our gear. Art salutes and says, "Yes Sir." And the day has started. An hour later the ground crew is gassing up our B-25, and ten minutes later our crew is in the bomber and in position. Senigalia Air Field, where we are stationed, is five minutes from the Adriatic Sea. Our two engines turn over with the usual deafening roar (the B-25 is the loudest plane in the air force with its two huge Wright r-2600 radial engines). On the ground when warning up, the two engines are deafening -- the ground crew wears air muffs for protection from the cold and the noise. At 5:30 AM we're in the air flying low over the Adriatic Sea and heading north.

The little brightly-colored sailboats are scattered over the sea. We're flying at about 225 MPH maybe 150 feet over the water. Our props are making mini-waves in the sea. We're cruising so low that I can see the frightened faces of the crews on the boats as we roar past them. Many of them have never been this close to a large plane. A few of the little sail-boats tip over, their sails flat in the water.

Suddenly we can see what looks like a large tug boat about a mile ahead. "Do we sink it?" Art asks me over the intercom. "Let's look it over," I answer. We swing left and head for the boat, we're roaring just over the water. I'm sitting in the nose of the medium bomber. We carry a full load of 2000 pounds of bombs, which I don't expect to use. As we near the boat, I can see about a dozen men on the deck looking anxiously at us as we close in. I have my hands on the single flexible 50-caliber machine gun in the nose of the plane. Two other 50s are attached to the side of the bomber. I can easily split the boat in half and kill all aboard. Something tells me to hold my fire.

As we close within a hundred yards of the boat, I wave my machine gun back and forth almost as a silent warning. When, to my surprise, all the men on the boat dive overboard into the water. I never pull the trigger. We are too close, and those on the boat are totally vulnerable. With a roaring swish, Art sends the bomber over the boat, and within a few minutes we are miles past the boat. "What was that?" asks Art over the phone. "Damned if I know, probably just a fishing expedition," I answer. "They didn't look dangerous and I didn't see any guns aboard, let the poor guys swim back. And they can thank the Army Air Force that they're still alive." I feel strangely happy that I hadn't fired a shot. Maybe it was the thrill of roaring over the blue water of the Adriatic on that gorgeous sunny day.

I get on the intercom. "Art," I start, "Venice is north maybe 50 miles. Let's buzz the city and give the eye-ties a thrill." Art answers, "You got it." And he banks the plane deeply as we head due north.

In half an hour we can see the outline of the buildings of the fabled city -- Venezia, the city of canals. We come in barely clearing the highest buildings in Venice. The roar of the B-25 must have awakened every citizen of Venice. I could see the faces of frightened people below as our bomber roars over the city. I'm tempted to open our bomb-bay doors and give the Venetians a real scare, but I'm afraid of a bomb accidentally breaking loose. We make three passes over Venice and then head back to Senigalia. The Adriatic Sea is shimmering in the mid-day sun, as I mumble to myself, "Well, at least I saw Venice even though it was only from the sky."

In another half hour Art lands the B-25 at Senigalia Air Field, another bloodless day in World War II, courtesy of the Twelfth Air Force.

Richard is in his eighties and still going strong. Do yourself a favor and get a subscription. At the very least, read some of his essays from the links on his front page:

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