What does it tell you when a Ponzi scheme can seem like a regular hedge fund?
What does it tell you when 50 Billion dollars can go down a rat hole and no one notices?
How is it different, in other words, than a thousand other mutual and hedge funds in terms of transparency? If we ask such high returns that a Ponzi scheme is needed to get there, and if other funds are getting those same kinds of returns, shouldn't we ask if something is still out of wack? Such as short-term thinking, looting by bonus, and financial gimmicks?
If you define a Ponzi scheme loosely as taking current revenues to pay off past creditors, we're all in a Ponzi scheme.
If you give yourself huge bonuses, hand out large dividends, and neglect to reinvest in your infrastructure and employees, you are indulging in a Ponzi Scheme.
I've maintained for years that most big box chains were all about building the next big box and the next, while ignoring whether the boxes you built five, ten, or twenty years ago were maintaining their sales, or indeed ever really did pay for themselves.
See here. I could order a ton of new product for my store, and my sales would be boosted. Just put it on the credit card. I need to get revenues up today, and I can always pay it back tomorrow.
Uh, uh. No ways. Been there, done that. It's easy, easy, easy to borrow the money and see that spike in sales, and it's damn near impossible to pay it back. The only way it could even conceivably be possible is on the backs of yet another bubble.
I couldn't understand how I could have a viable business -- and, after all, almost every other business that was around in Downtown Bend 29 years ago is gone with the wind -- paying my modest bills, driving a modest car and living in a modest house, doing a bit of shopping here and there when I need to, going on short vacations.
And everyone's living in a huge house, driving huge cars, and going on long vacations. My suspicion is that a whole bunch of those guys were borrowing off the short term of their businesses, or building up debt.
So the chickens have come home to roost. And what's the answer? Bail them out.
No, not the guys who lived within their means, but those poor, poor CEO's who couldn't possibly have seen what was coming. (Yeah, right.)
Who's benefiting from this collapse? Walmart. Of all places, Walmart. Because they have the cheap stuff.
Here's what I was hoping would happen. We'd all wake up and realize we've been on a spending binge, that we really didn't need to spend so much money, that we didn't really need all that crap. Cut back, live simply, take care of each other.
Instead, the message seems to be: O.K. I can't afford all the expensive doodads and knicknacks I used to get -- but I can still get lots of inexpensive crap from Walmart!
3 days ago