The New Colossus By Charles Payne
Long/Short Equity, Portfolio Strategy
Seeking Alpha Analyst Since 2009
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Question of the Day Should self-made millionaires hide in silence or reveal in their success knowing it might inspire some and anger others? Click here to post your answer and let Charles know what you think. He will air some on the Payne Nation radio show. |
The planet
Spotted owls and Horned toads
Women
College Students
Retirees
Blacks
Latinos
Illegal immigrants
Gays
Lesbians
Union workers
I think someone ran the numbers and said if we can cobble together enough special interest groups or victims groups we can stay in power forever. I saw the Avengers this weekend and it's the exact opposite. Instead of telling great people with amazing gifts they are warriors and should stand tall and make it happen, the narrative from the White House to Meet the Press is you are all under attack and only the government can save you. Moreover, in addition to saving you, any transgressions or mistakes on your part will be overlooked. From unprotected sex to dropping out of high school, you shouldn't be burdened with the worst possible outcome. If we can kill off the Republicans, we'll all dine on manna from rich folks and evil corporations.
For generations, the best individual investment anyone could make was a college degree. Now it's talked about like a curse because it costs a lot of money. It's an investment and it comes with no guarantees, but you would rather have that degree and $200,000 in debt than a high school diploma and no debt. In the meantime, we are supposed to be pissed at JP Morgan for losing $2.0 billion. If they always won, would we say the game was rigged? If you can't lose on a hedge then we wouldn't ever need them. The real deal is it's a chase for those that hate Wall Street to scream murder and those that backed the bail out to save face. The scheme didn't work and will never work.
If you don't want Wall Street to take excessive risk then stop bailing them out.
Perpetuating Victimhood
The thing about creating a mindset of victimization is you have to stoke it from time to time. It doesn't take a lot of work but you have to ring fence possibilities of things getting better beyond higher minimum wage and longer term unemployment. What if the victims see a different light-one that says you don't have to cower and in fact you can take advantage of the greatness of this nation rather than hating those that are climbing that ladder of success? This is the battle liberals have with keeping black people, especially young men, cowering for crumbs. Make no mistake, selling government versus self-reliance has been a huge win for liberals but there is a dilemma.
Rap music
Of course there's the violence, misogyny and every other word is the "n" word. But that's not what bothers liberals, and to be honest, I'm not sure it ever really did. Sure Tipper Gore made a name for herself, but the richer she and Al got the less I heard from her, although if she were ever left waiting for her delayed private jet because Jay Z jumped the line, she could get offended again. In the meantime, there is a campaign to re-domesticate the black man. This is like the left's version of Jim Crow. They can't legally stop these rappers from spitting lyrics about being and getting rich so they will intensify the negative campaign. I don't think it's going to work, but you never know.
I read an article in FT this weekend that complained about luxury rap that has propelled Kanye West and others to the top of the heap. It begins with how West took over the entire top floor of one of London's most prestigious hotels, relegating members of the royal family to lower floors. The article talks about the weed and the noise, but the heart of the matter is how rap has moved from its roots. In other words, how could these guys be talking about fabulous wealth and living the ultimate high life when black unemployment is so high? Of course, the article was sprinkled with the usual stuff about the 99% and the insensitivity of Kanye and company.
"In a time of economic hardship we are bedazzled by the way it conflates black power and wealth worship. It's a document of our times, an expression of a broken system we don't want to fix. Up there on the top floor, "the voice of this generation" does indeed have a message for the rest of us."
If rap music consisted of crying about racism and the mean world where there is no mobility, we would never hear a peep from the media. But all of a sudden, black people are starting to think they can have nice stuff ... I'm mean real nice stuff. This past Saturday there were more dark skinned people Mother's Day shopping at Louis Vuitton than white people. On one hand, I think it's dangerous for anyone to buy things they can't afford, but on the other hand, why shouldn't the sky or Louis be the limit?
Well, the more people that think they can own this stuff the less they will be satisfied with food stamps and public housing. Make no mistake, luxury rap is more dangerous to poverty pimps and the left than "gangsta" rap ever was.
The article quotes Chuck D from Public Enemy as the voice of reason, and while his street creed is impeccable, I like music that celebrates success more than killing policemen. The fact is only a handful of people knew about rap before I did as I hung out at a particular McDonald's in the Bronx in the mid 1970s that was one of the first spots to create the genre. I think rap grew out of music like James Brown's "Black and I'm Proud" and from Muhammad Ali boasting that he was the greatest at a time when a black servant in movies was afraid to the go to cellar because it was dark. It came from the same drive that made graffiti the voice of a generation.
I always loved the notion of someone getting on the microphone and saying I'm great and I don't need to wait for the powers that be that think all leading men and women look the same to provide the stamp of approval. Of course, it hasn't always been smooth sailing as rap's message of economic freedom is muffled with the notion that it's possible by dropping out of school. Plus, there isn't enough room for everyone to rap or play ball. Like I said, I hate the "n" word riddles in every song these days and some of the lyrics are just plain dumb. But I love the American Dream that includes owning a passport and traveling around the world. Particularly as Al Sharpton whines that a lack of identification is a racist plot.
Huddled Masses
Your huddled masses yearning to breathe free
The wretched refuse of your teeming shore...
Emma Lazarus
America once welcomed the rest of the world through its golden door lit by the torch of the Statue of Liberty, but these days we are being told we are all the huddled masses. That somehow we are the wretched refuse living in fear of a guy that used to bully kids in prep school. How can America regain its greatness if we are told greatness is a bad thing in the first place? How can we ignite the economy when we are told consumerism is vulgar?
How can we spark that engine when we are all hiding and waiting, when so many special interest groups are being told the glow they see isn't from a torch of liberty but the evil aspects of capitalism?
This is the new New Colossus, a country being ripped apart through a campaign of fear and envy. A country that creates new victim groups while trying to hold down old victim groups that might spin out of the grips of victimization.
When the media spends its time saying the worst thing about an ass like Kanye West is flaunting his wealth and the worst problem in the nation is that Mitt Romney might have been a jerk in high school, we are all in a lot of trouble. We are nothing more than a bunch of huddled masses.
Today's Session
The media spent all weekend hammering away at the JP Morgan trade, trying desperately to make a mountain out of a molehill. JP Morgan invented the CDS Credit Default Swap and is supposedly the best on the street at understanding and managing risk, so in that regard, maybe this whole thing is newsworthy, but a 2% loss on a given trade isn't a big deal or atypical. I didn't hear one person discuss simply never bailing out banks again. Instead the idea is to castrate the banks in a way that saps their vigor and independence. I'm not sure how this latest salvo on banks, profits, and risk will help the economy.
But this is a not-so-veiled attempt to provide an excuse to nationalize banks. The reason we don't break them up is because politicians salivate over the prospect of controlling them. This is really dumb. It's a white swan event. In the meantime while we are rubbernecking JP Morgan, which is like slowing down on the highway to watch someone change a flat tire there is a pile up ahead that could slow progress for years. The Europe disaster is getting worse-again. Spain and Italy raised money, but it wasn't cheap. Yields are now:
6.23% Spain
5.86% Italy
None of this news changes the fundamentals at many companies that are doing great things, but all stocks will be punished today. This is what we want, although not easy or pain-free, this is when we get the chance to buy great names at discounts. That said, I'm not forcing the issue because we know cheap can always get cheaper especially when all the attention is focused on the wrong area.
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