Wednesday, August 29, 2007

betting on winners

I think that sometimes we are all subject to tunnel vision, or worse, seeing only what we want to see. Here, and others' places, we focus on RE, and sometimes into the stock and money markets. But there is so much more in the big picture. I have believed for a while that there is a massive reallocation of cash going on, and have only little questions about who we are selling ourselves to. That's what a 40 year mortgage amounts to. I digress.

I scanned the images below from canadian art magazine. The first image is from Heffel Auction in Vancouver, and outlines recent sales of Canadian art. The results are as mind-boggling as the meteoric rise of real estate prices. A Lawren Harris that was estimated to sell for between $200-250K sold for $1.667M. Other paintings throughout the mag. sold for similarly astronomical prices. On the overleaf appears an advertisement for leveraging one's art collection for "Term Loans and Acquisition Financing", "Bridge Loans" and "Lines of Credit". It admonishes to "USE YOUR VALUABLE ART TO MEET YOUR FINANCIAL GOALS". Just like a HELOC.

It's all gambling and greed - plain and simple. I'm old enough to remember when the Irish Sweepstakes, Los Vegas, Reno, etc., were the only real gambling chances for the average Joe. Then came the Olympic Lottery in 1976, and suddenly we all had a chance to spend ten bucks to win a million. It went on from there. A bunch of fairy dust was sprinkled, and everyone wanted their money for nothing, and their chicks for free.

The smart ones got very rich (Buffet, ET AL), while the rest of the poor slumps are about to get very poor. This decadence is a pestilence, and a cleansing is in order.

Rant complete.

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