Do business people hate Southwest now?

[Andy]

Andy,

Reread my posts please. I think you missed my main point. I am well aware of Economic History. One of my favorite books is "The Ascent of Money" by Niall Ferguson. If you haven't read it already, you might want to pick it up. You would enjoy it. My wife is an Evil Investment Banker. She has a undergrad and grad in Economics and Finance from Univ of Virginia. In terms that I could understand, she basically said 2008 was a Tropical Storm compared to the Cat V that is coming our way. Her area of expertise is Bonds. She believes that with technology and hyper media exposure, that once a tripwire is crossed the meltdown will be so lightning fast that it will be very difficult, if not impossible, to contain. I'm grateful I am with Southwest and fairly senior. But as I posted earlier, EVERYONE is going to suffer. Some more than others. I don't give a damn where my all-coach, LCC ranks on some Business Travelers survey.

Since I know that John Layfield (Meredith Whitney's husband) doesn't fly for Southwest, I'll rule out the possibility that you're married to my financial heroine.

I think that your wife has a front row seat to the coming train wreck. Risk is completely mispriced in the bond markets (and in all financial markets) thanks to knucklehead Bernanke and the Fed. The Federal government and most states and municipalities are so far beyond debt saturation that I don't see how this doesn't end in cascading defaults across the entirety of public sector bonds. At this point, I think that corporate bonds are safer than public sector bonds and there's no way I'd even think about touching mortgage backed securities - that's just an ongoing train wreck. It's been a while since I've looked at CMOs; I looked at some from the 2005-2007 era and it was amazing how many of the tranches were zeroed out for near total loss to the tranche holders.

Question - where's your wife recommend putting money for wealth preservation? At the moment, I'm uncomfortable putting my money anywhere and have been sitting on cash for quite a while. I don't mind losing a bit due to inflation and the volitility of the markets makes everything a crap shoot.

 

[Sacha]

Mostly cash. She just came in from a conference about an hour ago and I pointed out that the market went up again....she laughed..she said that when alls it takes for the market to go up 2 to 3% is a news story that the dysfunctional Europeans are still "talking" about how they are going to handle the impending train wreck should tell anyone that everyone is completely out of real,concrete solutions..

I dunno but she pulled us out of everything 2 months before the last meltdown so I trust her judgement.

She did tell me she was aghast at several of the featured speakers lecturing on how well the present administration was handling the economy.....she looked around the conference tables at the other bankers facial expressions and said they were priceless...jaws on the table..cocktail hour was very entertaining if it wasn't so frightning...she is not very political but can distinctly remember many of them extolling the obvious brilliance of Obama in 2008 when all evidence was to the contrary. In her opinion, Ivy Leagues don't have an exam for common sense and she went to one.

P.S. I have several friends who's parents and they themselves lived through Argentinas hyperinflation. So their lessons about being in cash only goes so far. They were successful businessmen but felt there was only one option and that was to come here.....Sounds great....but where do we go?.....

I believe a great President and responsible House and Senate can turn this around.....My wife believes the mathematics are beyond the point of no return.

 

[Andy]

Thanks for the summary on the conference.

In her opinion, Ivy Leagues don't have an exam for common sense and she went to one.

Roger that. Some of the dumbest people I've listened to are Ivy League grads. I also majored in economics - back in the '80s - and was aghast at how my Ivy League grad professors were unable to comprehend that running large annual federal deficits were going to create problems due to pulling demand forward. They were all supply side idiots who smoked way too much hopium. ... don't get me started on the faux-Keynesian Klowns running around today.
I wasn't too concerned about debt saturation until I started seeing exotic mortgages pop up in late 2000. I was surprised the end game took so long in housing.

P.S. I have several friends who's parents and they themselves lived through Argentinas hyperinflation. So their lessons about being in cash only goes so far. They were successful businessmen but felt there was only one option and that was to come here.....Sounds great....but where do we go?.....

I've been expecting a turn from deflationary pressures to hyperinflationary pressures due to Bernanke/Fed actions but even those haven't been able to fill the deflationary void caused by credit contraction. Bernanke/Fed may be able to avoid deflation but a bond collapse will take hyperinflation off of the table, at least temporarily and bring a pretty heavy dose of deflation to the economy.
Deflation kills debtors; just look at how much debt our federal/state/municipal governments have wracked up since the start of the Great Society. It's going to be coyote ugly.

My wife believes the mathematics are beyond the point of no return.

I agree with your wife. The math says that we're heading for something similar to a 1998-style Russian collapse. http://en.wikipedia.org/wiki/1998_Russian_financial_crisis

A decade or more of painful bone crushing austerity is the medicine that we need to take. The longer we delay, the more painful the medicine.

 

[Sacha]

Agree. I'm a big fan of Thomas Sowell. I have read almost everything he has written (book wise). He was interviewed last night on TV for about a half hour and it was rather sobering.

Funny story for you about Econ. Last month I went to Charleston with the wife as her Company hosted a Bond Conference. One night the wife, the President of her company and a new gal went to dinner together and they asked me to tag along. The President is fascinated with Aviation so my wife made me go. At dinner, I asked the new gal, a recent Economics Grad from Dartmouth, if she was a fan of Hayek or Keynes in a joking manner.....she gave me a wide eyed look and said ....who? I repeated the question thinking she was pulling my leg...she wasn't. I looked at my wifes boss and he was more shocked than my wife or I...my wife quickly changed the subject to good restaurants in Chicago........This lady starts at Harvard Grad next year..

 

[Andy]

I asked the new gal, a recent Economics Grad from Dartmouth, if she was a fan of Hayek or Keynes in a joking manner.....she gave me a wide eyed look and said ....who? I repeated the question thinking she was pulling my leg...she wasn't. I looked at my wifes boss and he was more shocked than my wife or I...my wife quickly changed the subject to good restaurants in Chicago........This lady starts at Harvard Grad next year..

Ow. I take it she's HOT. She's going to be in trouble when her looks fade.

Edit: You need to send her this link: http://www.youtube.com/watch?v=d0nERTFo-Sk

 

[Flycatcher99]

Agree. I'm a big fan of Thomas Sowell. I have read almost everything he has written (book wise). He was interviewed last night on TV for about a half hour and it was rather sobering.

I'm a big Thomas Sowell fan too. Great mind, great writer. I love his columns. His and Krauthammers'.

 

[Sacha]

I'm a big Thomas Sowell fan too. Great mind, great writer. I love his columns. His and Krauthammers'.

About a year ago, I had Dr. Krauthammer on my flight from BWI to MSY.
We were delayed a little bit so I chatted with him for about 20 minutes. He is a very friendly, funny guy. We spent most of our time ragging on Obama....
I always respected him but thought he would not be someone you would want to approach in public....not so...

It was a bit of work to get him on and off the airplane but he was very gracious and appreciative and went out of his way to put everyone at ease...
A class act all the way.....

 

[Godfather]

General...

Can't believe I'm going to say this, but on behalf of one of DAL's many business traveler I just wanted to say THANK YOU DELTA & AA for having business class in the US domestic market. Well worth the extra $$. Of course, we live in a place where DAL rules the market. For personal travel, we (wife and I) enjoyed Air Tran with it's 1st/Biz class but now with the merger, we can kiss that goodbye. AT's Biz/1st class was a good product and sold well. Gonna miss it but DAL is now my company's and spouse's company choice for business travel and Corporate Crew Deadheading.

 

[Sacha]

Question: Why wasn't it your first choice before? I mean since they dominate the city where you live (ATL)? And they would always match Airtran on competing markets/routes and have widebodies whereas Airtran has 717/737. Plus no one can beat Delta's choice when it comes to redeeming frequent flyer miles around the globe....

Why would you fly for business on Delta, but then switch to Airtran for personal use?
Wouldn't you have lots of miles on Delta? My wife and all her family and coworkers use Delta for business and personal travel as well.

You say on one hand you didn't mind the extra dollars on Delta.....but then you say you are going to miss Airtran?

 

[General Lee]

Man, Gen Lee's comments really hit home. Guess I should have gone with one of those awesome legacy carriers. Wait a minute--just looked at my Oct 20th paycheck. Never mind! (insert evil laugh)

Yeah, and the line guy at Lubbuttocks actually heard you. Thumbs up from him. Echo, echo, echo, echo....... Good luck on the continuation of your trip today---onto ABQ, then LAS, then BOI, then SLC, and finally STL. Don't worry, there will be an airport Pizza Hut Express you can blow all your money on somewhere downline..... Go for it! (Insert hearty laugh AT YOU)


Bye Bye---General Lee