Friday, November 28, 2008

The Entitled Ones

My Dear Barack,

Some claim that Wall Street is driven by two forces: fear and fantasy, which is why Warren Buffet set up shop in Omaha. He wanted to put as much distance as possible between himself and the deluded mob.

However, there is a third force that came to the fore during your predecessor’s ill-fated administration, and that is entitlement.

This sense of entitlement is not confined to Wall Street, but is deeply ingrained in the American psyche. It has to do with the strong sense that our nation was founded by, and is guided by, the Almighty. (The country that believes it is blessed by Providence has already taken the first step on the path to self-destruction.)

Wall Street has carried this sense of entitlement to such heights that the thinned atmosphere has caused irreversible brain damage. As one writer puts it, “For a quarter of a century, the inbred products of the Ivy League puppy mills have known nothing but a rising trend in asset prices.”

Yes, Barack, the poor darlings became addicted to returns of 20% on their investments. This resulted in an anomaly that our financial elite failed to wrap their damaged brains around. The above writer explains it by pointing out that:

Over the long term, we know that average investment cannot grow faster than the economy, for investments ultimately are valued according to cash flows, and cash flows stem from economic growth. Real American gross domestic product grew by 2% a year on average between 1929 and 2007. Whence came the enormous returns to the Ivy League? Some of them surely came from betting on the right horse, but most came from privileged access to leverage.

Leverage was the fantasy; a leverage of anywhere from 20:1 to 40:1 gave such an illusion of prosperity that it blinded the Ivy Leaguers to reality. All they knew was that they were entitled to a twenty-percent return, and they didn't care how much damage they caused while pursuing it.

So, in dealing with our financial wizards, you must remember that you are dealing with petulant, spoiled children who have had their candy taken away from them. But no matter how unruly they are, they are still run the show, so it is up to you to give them their candy back so they can continue to leverage their little hearts out.

Entitlement is a great blindfold. The truth is that the only thing anyone is entitled to is a birth, a tax bill and a funeral, unless they’re an Ivy Leaguer. Then they’re entitled to a 20% return on investment.

Your admirer,
Belacqua Jones

3 comments:

thepoetryman said...

IVY LEAGUE=BRAIN DAMAGE...

Thank goodness I went to college in Arkansas.

Case Wagenvoord said...

I think it's all the inbreeding.

Anonymous said...

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