Venture Crapital

I'm watching Larry Kudlow tear apart some senator on CNBC about the hysteria over the Chinese bid for Unocal. I'm agreeing with every word he says. Wow.


Larry is right, if the US are the champions of the free market, then they have to always champion it, not only when its in their interests to so, but when somebody else plays the same rules to their own advantage.


Right now, the US is making three demands on the Chinese:


1. Keep taking US dollars, even though their value is being deliberately watered down by rampant credit and monetary expansion.


2. Revalue the Yuan. In other words: while we ramp up the printing presses and devalue our currency, we want you to keep taking more of it.


3. Take more and more of this US paper, but whatever you do, don't use any of it to buy anything of value to us. Especially energy.


That isn't the type of environment mutually healthy trading relationships are made of. As Warren Buffet opined earlier today, if the US is going to keep consuming more than they're producing to the tune of 2 billion a day, then they have to be prepared to sell off valuable assets. What else are the trading partners going to do with enormous piles of US dollars which are rapidly losing value?


On other fronts my Fedex $75 Puts expired worthless on friday and today they warned and plunged over $6 a share. As the old adage goes: "The graveyards of Wall St. are littered with the bones of those who were too early".

I've often wondered how Dave Lewis'Chaos-onomics could be so overlooked among the contrarian/libertarian/goldbug crew. I can best descibe him as an "economic philosopher" of the highest calibre, but what do I know? Large swaths of his writing simply go over my head. I don't have the philosophical let alone economic background to understand a lot of it.


Yet in his columns I recognized something rare in this day and age. Something informed, not only from a deep repository of a well read individual but from his experience in the financial markets and his first hand accounts of financial hinge moments like the Asian Crisis. Contrast with the unreasoned, biased cheerleading of a Kudlow or the appalling non-thinking drivel of a Cramer , Dave Lewis' columns were grounded in an authenticity and depth of knowledge unheard of in mainstream financial commentary.


And now, it's over. Lewis has announced in his swan song post that he set out to research Peak Oil two months ago, wound up doing some philosophical soul searching, and arrived at the conclusion not to bother with it anymore:

I am reminded of Thomas Kuhn's arguments in The Structure of Scientific Revolutions these days as I watch the dance of politics and economics, particularly the view that such transitions, from paradigm to paradigm, are not graceful. I am also reminded of the waning stages of any great ethical faith and Capitalism, like representative government, was, in my view, such a faith. In the early stages only a few believe but their belief is strong and pure. Then the faith is diluted but spread to many. In the later stages the faith is assumed, by which I mean, to use chivalry as an example, initially Knights aspired to be chivalrous, and in later periods, as that age was ending, they were merely assumed, by themselves more than by others, to be so. That the United States is often considered to BE a Capitalist economy, rather than an economy which aspires to follow those tenets suggests to me that faith in that system among the powers that be is virtually non-existent. If the powers that be don't believe in Capitalism as ethic to allocate resource any more, why should I waste my time thinking about the world in that paradigm. Of course, I could be wrong and all is well. In either case, regular commentary on the lines I had been following seems pointless.

It's a shame. I hope he'll keep his writings up, he has stated he will keep a closed mailing list going.