naked capitalism

Shortly after President-elect Barack Obama is sworn-in to the Chief Executive’s office, plans will be announced for the swift closing of Gitmo’s sordid chapter in the so-called war on terror. But in a shocking about-face of opinion (to those and readers who think they know me), I will beg to differ with Obama about the imminent policy reversal.

Not, of course, that I think the chapter shouldn’t be closed. It should and non-too-soon. But America’s little breeze-block, barbed-wired gites-in-the-sun for the morally-compromised and legally-challenged may yet have some legs and alternative uses. I am certain I am not the only one to conjure up alternative uses, but I will nonetheless put them to you. First, Gitmo would be a just place to deliver [many] of the lamest (and I haste to call them “public servants”) decision-makers in America’s history who’ve past or presently mal-served the American people. Legal luminaries (ahemmm…) such as Alberto Gonzales, the Dark Lord, Mr Rove, Scooter Libby, as well as Gulf War architects Wolfowitz, Feith, and Perle. Then of course there could be a wing reserved for Delay, Lott and Jack Abramoff, and the original enablers of the Bush-presidency-fiasco, brother Jeb, and Florida’s DARling Katherine Harris.

And there is no shortage of solitary cells, suitable for the likes of Mozillo, Cassano, Fuld, in addition to the host of negligent officials at the SEC, Fed, and Treasury (and Congress) who promulgated and defended the lack of public interest as a policy unto itself. Can’t you see it: Friday night movies replaying for their edification Michael Douglas’ rendition of “Greed is Good”. Torture? I do have objection to the physical kind, but see nothing wrong with the loud unceasing piping-in 24-7 of Limbaugh, Savage, Hannity and O’Reilly.

Surely there are others to fill the ranks: the new administration could rendite Gordon Brown and his former cohort enablers who, contrary to current belief, have wrecked the economy of Great Britain on a scale on par with that achieved by the Luftwaffe, by encouraging, permitting, justifying and apologizing for a leverage-binge equivalent to – if not greater than – that of the of the former colonials.

Surely you’ll all have a few personal favorites you think worthy of an extended all-expense paid “holiday” in the sun…

Slow on the draw, I missed the Aug 1 release of FSA’s Investigation into accusations that HBOS was torpedoed by hedge funds spreading malicious rumours. If you missed it too, FT-Alphaville has the detail here, but I’ll save you the trouble and summarize it for you below.

10. Something went seriously wrong in the market that mid-March day in regards to HBOS share price moves.

9. Our research staff reconstructed the day’s activity by looking at exchange time&sales, derivatives trades, emails, phone records, chat rooms, some internet porn (during our break) spoke with reporters, and consulted a psychic.

8. What we strikingly found out was that the stock price went down…a lot.

7. It was clearly the result of more sellers than buyers which made the HBOS price fall more than it would have if this hadn’t been the case.

6. This was exacerbated by the fact the few people wanted to buy, and lots wanted to sell (or do nothing), following the manslaughter of Bear Stearns the week prior. In our view (as a non-regulator) this in entirely understandable.

5. Some of the selling was apparently caused by rumours of an unknown origin that were clearly malicious. If we ever catch them, we will hang them upside-down in the naughty-tree.

4. While in this instance, we didn’t find any obviously guilty people as everyone had plausible excuses for their activity, nor did we find the so-called smoking gun, we did find a few computers that were culpable (the were Dell’s apparently) as their algorithmic strategies sold when they saw others selling.

3. We DID confirm that when market participants are stressed and their nerves are frayed, rumours can have outsized impacts upon share prices.

2. Irrespective the outcome of this investigation, we will be watching you in the future. Watching is the operative word here, as it remains difficult to actually prove anything in such cases.

1. Most importantly, in order to deal with such situations in the future, we will be studying how to write better reports, and are resolved to improving our communication. This will give comfort to our constituency that they can safely remain here in London, and needn’t move to Geneva.

There is an interesting tug-o-war between the value of capital and the value of management evident in hedge funds, but even more strikingly highlighted perhaps in reinsurance. This is worthy of examination if only for the fact that they sit at opposite ends of the proverbial rope, producing (at present) an unimaginably large gulf between the two.

Anchoring one side, we have have the traditional reinsurance company. Once jokingly the last refuge for those ex-college football players that failed in the sleepy primary insurance market, these companies have come a long way from their disparaging caricature and Lloyds scandals – a time coinciding with capacity shortages from Hurricane Andrew that spawned a new class of dedicated entity with less-conflicted, more professional managements. They now sport reasonably disciplined underwriting and specialty lines that give them some diversification, with some even moving up the food chain to compete in the primary market. In this realm, the market for new-venture creation is reasonably efficient with an able management team able to raise capital from a variety of experienced private equity and dedicated insurance investors and garner between 5 & 10% of equity on long-term incentive plans in exchange for pedigreed stewardship of capital in a start-up. Capital thus maintains 90% to 95% of the upside (less operating costs), symmetrically bearing the same downside. As with most externally-funded enterprises, it is Capital that reaps most (90 – 95%) of the the reward in the growth [if any] of the enterprise. This “split” is seen as reasonably sufficient to align Management’s and Capital’s interests, without creating undue agent-principal dilemmas, or grandiose empire-building endeavors.

Anchoring the other side, we have a hedge-fund model applied to a dedicated reinsurance risk-taker, such as that which London-based MAN recently purchased a portion. Here, Capital (i.e. the Investor) pays “one-and-something” plus a deeded 20% performance fee on the (net) upside, though bears the full burden of the downside-risk, albeit without performance fees. Perhaps there is also a high-water mark, for which one would need to review the PPM in detail, the presence of which increases the attractiveness over the course of the profit and loss of a full cycle. Capital placed at risk here has ALL the downside of the underwritten “risk”, but none of the upside of the business growth. Here management receives a full 20% of immediate economic spoils and 100% of the business-growth options that arise from the successful stewarding of Capital ostensibly through wise portfolio management, prudent risk-management, and avoiding adverse risk, and undoubtedly a barge-full-’o-luck.

The obvious question arises as to precisely “why” the Capital funding a purposeful reinsurance company formation is able to obtain seemingly so much more of the upside (at the expense of management) with seemingly the same downside, than Capital investing in a reinsurance hedge fund. If it were a matter of a small difference, it would be a dull topic of conversation, and you might be watching “House” re-runs instead of reading this. But being that the order of magnitude of difference is so large, it demands an answer.

The first question should be: are we comparing “like with like”? Th answer is essentially is yes. Both are providing risk-capital to effectively underwrite reinsurance risk. Both are more or less dependent upon external events for realization of profit. Both use essentially the same standard industry modeling techniques (eg RMS). And both profit more (less) in hard (soft) markets respectively. There may exist subtle differences in risk selection, leverage, and portfolio management, but these are less important determinants in the scheme of things. Florida windstorm or California quake are essentially homogenuous risks.

So what is different that might possibly be used as an excuse to justify keeping all the business upside or yielding ALL of it in its entirety it to one’s agent? Liquidity, for one, differs – at least on the surface. The commitment of insurance VC is not an annual event, whereas Capital in a reinsurance hedge fund can be withdrawn within stipulated guidelines, typically less onerous than VC lock-ups. Of course if you buy a share of a listed reinsurance company in the secondary market, there are no restrictions. In fact, the reinsurance hedge-fund might be “less liquid”, by comparison. To be fair, buying risk through the trading of shares entails high market impact for sizable risk, but this too is reasonably manageable if spread across a portfolio.

Leverage and prudence may also differ. Katrina fatally blew-apart more than one catastrophe reinsurer – not because it was SOOO bad, but because management over-leveraged and under-diversified. In bridge and traders parlance it’s called “shooting the moon”. Most diversified, well run companies took hits and stomached the loss but it IS easier for the corporate entity to “reach” via leverage than the reinsurance investment manager who – without a proper balance sheet – well might face jail for a similar transgression. That is, of course, if he could a find a counterparty dullard enough to accept an under-capitalised promise for which there is no recourse…

Investment returns – premiums, excess capital, etc. provide another temptation for management not available to the reinsurance hedge fund. This could be good or bad, depending upon whether your investment pecadillo happens to be called “SCA” and Amaranth or its called “Paulson Global Opportunity Fund”. On this front, many-a-reinsurance company has failed miserably in its pursuit of higher returns(hedge funds), non-core empire building (SCA), or social status hob-nobbing (Hollywood movie investment). Others however have soundly and soberly managed to earn higher returns than those available to just underwriting risk and placing it some collateralized trust structure. It is understandable for investors to desire to disentangle the two. However, IF one, for whatever reason, has investment alpha, the coorporate structure allows this to be better exploited resulting in higher returns overall to investors. However, the jury thus remains out on this front as to whose advantage this favours.

Cost structures are different. That is a major selling point of the hedge fund, vs. the largesse of corporate boards, Sarbox compliance, prima-dona underwriters, staff pensions costs, etc. But many costs are inherent in acquiring business to develop a more diversified risk book, and building an enterprise with depth, longevity, and redundancy that makes counterparty’s feel safe, and allows more complex structures and risks to be assumed (presumably with better spreads) rather than merely marginally providing liquidity to a limited number of homogenous markets. Wining and dining, freebies, conferences, etc.fees, commissions, kickbacks all entice business, and senior people with relationships and expertise require meaningful compensation all which hits the bottom line. Moreover, these costs exist even in a disaster year where losses pile up due to the disaster or catastrophe-du-jour. One could argue that the Corporate’s expense ratio is not dissimilar to “2&20″ which might make one agnostic as to which structure one invests with. In reality, these “costs” are part-capex, and should build greater long-term value. Yet, even IF the former were true, and one was indifferent, there is still the little chestnut about whether the business “optionality” should accrue to Management or Capital.

Transparency. Paradoxically, the HF structure provides MORE transparency than the corporate entity. Industry insiders say that a “clean reinsurer” is an oxymoron. There are only “less bad ones”. Whether its the investment portfolio, or the current risk position, legacy risks, or malfeasance, one is never quite certain what’s under hood. That said, there is no shortage of younger (both public and private cos. who are – relatively speaking – “clean”, and there is nothing to prevent motivated capital from essentially setting up themselves (as Citadel, DE SHaw, and others have done), and cutting a deal with a capable management team.

While none of these reasons themselves are compelling, is there not something that explains it? For here where are today, with fine (not that I am qualified to pass this judgment) listed reinsurance companies trading at 5x forecast (and historical) earnings and up to 25% discounts to tangible book, solid management teams and well-operating infrastructures, existing relationships and books of business, and YET, MAN decides to buy into the other model, i.e. the hedge fund model, despite the seeming availability of BOTH the underwriting upside AND future enterprise appreciation upside, and do it at a reasonable discount too.

One possible answer might be – as queer and comical as it sounds – is that they simply have different investor bases. The corporates have smart, long-term, money who presumably value long-term growth and are willing to stomach illiquidity, volatility and discounts to book over the intermediate-term. The hedge fund model has investors that values one thing: “one-percent-per-month” in addition to the technicality that they often CAN ONLY INVEST IN HEDGE FUNDS, irrespective of how sub-optimal it may in comparison to investing in the same risk through a listed corporate. Yet another example of a local optimization problem. For the reinsurance HF investors are NOT irrational – just constrained, and a tad self-interested (yet another principal-agent dilemma). One can measureably sympathize with the investor who rolled the dice and bought a portfolio of listed reinsurers in 2007, which navigated the storm season and earthquake risk well, made ~18% returns on their equity except for the odd-ball who had monoline(s) exposure, YET their shareholders stomached negative mark-to-market returns (including dividends) despite the increases in book vals. But that was then, and this is now. When listed co’s are trading at large prems to book, I can understand the aversion of opportunistic investors who just want the underwriting risk. But when they are cheap, very cheap, wisdom almost certainly favours the listed corporate, hands-down.

While the original question was “why would Capital not extract full potential rents from its existence, size and investment horizon?” perhaps I should lay that aside, and invert it into the more germane question which is: “IF the gulf is so wide, why would one start or join a reinsurer when they could start a reinsurance hedge fund??!?!”

Xposted by “Cassandra” from Cassandra Does Tokyo

IF one is the chief a monoline, bank or other financial holding company with large, dubious, asset-backed exposures, it is understandable that during the denial phase of coming to terms with one’s fate, that one would like to blame someone else, anyone else, but in particular, blame the nefarious Short Sellers. We’ll ignore the asymmetry of absent blame (or even mere introspection) on the way up.

But today’s short-seller whinging award comes from the most unlikely of sources in the most unlikely of sectors: Australia’s richest man, none other than John “Twiggy” Forrest, chairman and founder of emerging iron-ore behemoth, Fortescue Metals Pty. (ticker FMG AU Equity for Bloombergers).

According to today’s Sydney Morning Herald,

Iron ore miner Fortescue Metals Group Ltd, headed by Mr Forrest, has being targeted by hedge funds resulting in a more than one third fall in the company’s value over the past six weeks.

The activity has also cut Mr Forrest’s paper fortune in Fortescue since hedge funds began targeting the stock when it was trading at a high of $13.15 a share on June 25.

“Those people who make a living out of short selling stocks … are bordering on criminality,” Mr Forrest told delegates on Monday at the Diggers and Dealers conference in Kalgoorlie, Western Australia.

No matter that FMG (seen in chart above) vaulted more than 115% from A$6 to A$13 in the current YTD, punctuated by an unusually firm End-of-Quarter-2 close, nor that it had increased more than 900% since Jan 1, 2007.

The SMH continued:

“Those stock market players who have no interest in the company, who spread or propagate rumours that they haven’t been bothered to check … and then sell into the back of those rumours, I don’t think they’re doing anyone any good,” Mr Forrest said.

“And of course, when we hear that we’ve got cracks in the bottom of our ore cars, or even a ship has sunk at the berth.

“We know those things are being put out to scare the mums and dads into selling their shares and of course the people who’ve shorted their shares then go and buy those shares off.”

Mr Forrest also attacked investment banks who defended the practice.

“The investment banks who defend short selling are defending real personal interest,” he said.

Mr Forrest, of course, is not in any way defending his personal real interest with his accusations. After all his mark-to-market wealth of Fortescue shares alone only declined a mere A$4 billion to A$8 billion. And while Mr Forrest’s faux-concern for little Bruces & Sheilas across oz is heart-warming, by way of full disclosure, most of FMG stock is locked up between himself, Steinberg’s Leucadia, Falcone’s Harbinger, whom together control @63%. Perhaps, one of the other big-three is hedging out the enormous gains of the prior 18 months, particularly as bottom falls out from under US economic activity in general, and the commodity complex in particular.

In any case, I am not defending short sellers. Nor making any statement about whether FMG’s share price is too high or too low. But I remain intrigued by the ease and rapidity that longs unsheath their asymmetrical insinuations that anything which goes down – even something that has appreciated as outrageously as Fortescue – even something with some serious logistical issues which remain to resolved – must have a nefarious connection…and is not the result of ordinary profit-taking, trend-followers reversing positions, or principled value investors using it to hedge the market risk of other, now-less-exuberantly valued miners, in currencies less susceptible to carry-unwind risk.

I wonder if Mr Forrest is backing up his giant Terex Titan to buy more down here from The Short Sellers, particularly if such a fall is as unwarranted as he suggests? Last official filings, however, showed him selling a cool A$40million of stock during the prior quarter…

(xposted by “Cassandra” from Cassandra Does Tokyo

If anyone needs any any evidence that the Wall Street Journal is a mere prenteder in comparison to Pearson’s Financial Times, they need look no farther than Dancing The Freakout – Was Jim Cramer Right?. Of course one piece doesn’t make a newspaper, but attributing early call of The Arrival of The Big One to Mr Cramer – a mere housetop weatherwane – albeit a Tourette’s-affected one – is absurd, though perhaps not an unexpected one for The Journal.

The primary difference begins with both media organizations obviously need to serve their respective audiences. The quality of the output initially reflects this. But why should the FT feel compelled to constantly scratch under the skin of capitalism (and prevailing politics) whilst the WSJ cheerleads, rarely ruffles feathers, and maintains the narrowest (and most dogmatic) of political lines – the former evidenced again in this piece by asking the most fatuous of questions, rather entertaining pre-emptive thoughts about how “the market” might be wrong?

I believe that it is a function of “class”, eschewed as the term may be in America, and most American analyses. For in Britain, the City readers of the FT knew their class inherently. Mobility was poor, and along with one’s class, one’s political interests were implicitly understood. And so a far more factual, unintermediated approach evolved, with opinion segregated and flagged. The readers of the Wall St. Journal being aspirational, were far amorphous and without solid class affiliations and attendant interests, far more politically malleable. And so the Journal editors took it upon themselves to shape and mold the opinion of numerous fence-sitters into the dubious but doctrinaire fold of the inviolable primacy of the free market, with all its political baggage. In perfect markets, this may be tolerable, but in a modernity where business interests have captured the flag, investment in rent-seeking is often more attractive than capital investment, oligopoly’s are rife, the potential for the mouthpiece of the market to morph into something not dissimilar from Radio Pyangyang is a clear and present danger.

It is precisely the FTs confidence that gives it the freedom to critical analyse anything and everything pursue systemic faults objectively. For despite their role as protaganist for capitalism, there are no sacred cows that threaten their, and their reader’s position. It is understood implicitly that ironing out the kinks in the market and the system, however inimical to one special interest or another enhances the their positions. It is this same confidence that allows it to comfortably inject collegiate humour, satire and parody – as seen in Lex, or FT Alphaville – something completely absent from the strident, over-earnest, near-paranoid dogmatism one witnesses in the Journal.

So one year on, asking whether Cramer is “Da’ Man” for his syphilitic rant really misses the point, which should be: Where was he (and this refers to all Cramers and their mindless ilk) during the prior four years? Why wasn’t he ranting about the sheer stupidity of Americans withdrawing equity from their homes en masse at increasingly inflated prices? Why, pray tell was he not doing angry cartwheels in regards to the PBoCs absurd accumulation of USD reserves to prevent a classical BW correction of the USD relative to the RMB? Why was he not flagging the Bush tax cuts and lack of US energy policy as massively shortsighted endeavors with imminent and meaningful negative consequences for the entire nation (and perhaps the financial system of the entire world)?? Where was the outcry when AGs fed sat at nearZIRP, woefully behind the curve? And one can go on, but I’ve already beaten it to death.

There is a reason I eschew The Journal except when I am stranded without my own material and find a copy laying about upon the airline seat next me, which is rarely if ever…

For those who missed it, University of Illinois law prof Robert Lawless at Credit Slips posted a nice colourful update to YoY changes in US (personal – I presume) Bankruptcy Filings, state-by-state, along with a table rank-ordering the data. As one might expect, a year into crunchy credit coincidental to @$125 oil, vaulting coal prices, and 50% rises in many softs, the credit-sensitive states are ignominiously on top, with energy and ag states at the bottom. Using my own powers of visual agglomeration, there appears (make what you will of it) to be a decided red-state/blue-state schism to the changes.

Compare (or contrast) this to Business Bankruptcies posted and discussed in the Big Picture a few days ago. While there is some reasonable overlap, Lawless’ pictograph is more indicative of housing distress, and his discussion perhaps more reflective of the actual flashpoints across the country.

Following a whirlwind global tour, US media coverage would have one believe that Mr Obama had wowed Europe’s most important nation. However, a close look by Der Spielgel at German reactions to Obama suggests they are rather cautious and less then-than-enthusiastic across the German political spectrum, though for far different reasons than American skeptics. Why? ‘Continuation of The War on Terror’ rhetoric and its implied obligations along with an expectation of increased commitments to Afghanistan are seemingly their prime concerns. Read the entire article in Der Spiegel’s Obama Summary
(hat tip to Ben Carliner)

(Submitted by “Cassandra” from Cassanadra Does Tokyo)

Considering our location high on the ridgeline above the steep slopes of deflation on one side and the inflationary abyss n the other, and despite our slip (in the last two weeks) seemingly towards deflation, I thought it apt to offer up some non-traditional stores of value given the teetering banking system, near vertical ascent of commodities, and the still highly departed real estate indices as multiples of median incomes, all which cause consternation when it comes to preserving capital (at least for the contrarian). Of course, everyone is encouraged to share their own.

Anyone who’s ever happened upon any episode of Antiques Roadshow is familiar with the increasing value of things vintage. Factory Farming and GMO crops that require pesticide and ever-more expensive nitrates could result in nice premiums to the colourful but gnarly-looking heirloom varieties (pictured left). And in the worst case, should things not work out as planned, they would make for delicious eating!

Garden sculpture too provides a fascinating utilitarian place to keep your money both safe and close by – especially if its a veritable work of the late Alexander Calder. Indeed, too big to steal, it simply sits, making itself wondrously beautiful to all who gaze upon it, and best of all, appreciates – even on weekends! Fortunately, such behemoths don’t fit on Ken Griffin’s roof terrace, so their values remain tame by comparison to smaller, more portable impressionist wall-hangings.

The Dutch have always been sober-minded despite their paradoxical tolerance of cannabis, evidenced here by their practical love-affair with the Windmill. Considering how long these beauties have been around, they must have ultra-long depreciation schedules that would warm the heart of even the most parsimonious purchasers.

War, depressions, floods have not deterred the thronging masses of football fans and the popular spirit of athletic competition. The problem is that professional sports has been gripped by a “Location Location Location”-like mantra that has lead well-heeled psychic-income-seeking egos to pay top-dollar (and pound!) for trophies that will likely hemorrhage cash when the going gets errr ummmm tough – at least until the proverbial screws are turned in earnest. Second-tier sports clubs (like Millwall for example, or even Hamilton Academical) share the same consumer non-durable demand characteristics for a fraction of the price of, say, Chelsky. And Millwall has the added benefit of providing Vinnie Jones-like muscle for less-than-salubrious “other pursuits” if things do, in fact, get even tougher-than-expected.

Little could be more basic than transport. So if oil has “peaked” and cold nuclear fusion, and the BTF Flux-Capacitor remain far-off pipe-dreams, what could be better than owning your own existing commuter rail service?!? Japan remains one of the few places where private rail service demonstrably works AND throws off reasonable cash-flow which after almost two decades of ratings compression are almost attractive. No NIMBY complaints as the lines are laid and more or less paid for. OK so Nagoya Rail’s (pictured here) dated commuter cars need capex for sprucing up, but the earnings yields are reasonsably attractive (compared to JGBs) and there is reputed to be large under-valued land holdings still on the books if ever asset prices in Japan do revive.

One of the greatest stores of value, amusingly, has been paper. Not newsprint, or the ordinary kind, but the type bearing the likeness of the legendary Honus Wagner. The T207 has continued appreciate at quasi-exponential rates, long after my cousin paid for his Harvard education with the unlikely (at the time) and short-sighted (in retrospect) sale for a sum of five-digits. Compared to current values, he might as well have given it away…

Diamond-encrusted skulls, while not MY my metaphorical cup of tea, apparently are de rigeur in certain circles. I certainly am not qualified to pass judgment on this particular one’s artistic merit. Nor do I wish (here) to sully those whose opinion of such a piece tends towards the favorable. So despite my inherent aesthetic and financial skepticism, I bring to your attention that it remains possible that – as with Faberge eggs – such curios might in fact turn out to be sound (and portable!) long term stores of value.

While Waterworld set Kevin Costner’s career back a few notches, it did (years after, at least) provide some things to ruminate about (outside of what Zimbabwe might resemble were it ruled by a crazed Dennis Hopper instead of lunatic Robert Mugabe. But in a world of increasingly sought-after petrol and high energy costs, what could be more useful, apt, and elegantly graceful than a beautiful wooden sloop using nothing but the power of the wind for locomotion. As a boat owner, I do not dispute that the happiest days in boat owner’s life are the day one buys it, and the day one sells it. Yet, I cannot help but dream that in such an environment a modest, but beautiful sailing vessel will become MORE cherished (and valued!!!) with time. Oh, and true to form, no kevlar – cloth sails only please!

Stands of timber are at once both majestic and economically useful. I’ve got some. Swenson’s got some. Brad Pitt and Angelina Jolie just got some 500-odd ha with their Chateau in southern France. I still like RYN and PCL for their combination of still-cheap implied valuation, potential inflation hedge, and the fact that I salivate at the thought of how many large and small-denomination currency notes can be printed with the paper from a single hectare…

Everyone should have a trusty vintage Alembic in their garage, barn, or cellar, though few in fact do, which makes having one all the more attractive. Since long before Shakespeare’s day (epoch and associated alchemist pictured with 16th century still adjacently) the Alembic has provided merriment and valuable liquid goods of exchange for many an entrepreneur and moonshiner. The raw inputs are as plentiful as the multitudes of flavourful and potent outputs. Nice copper Alembics, in addition to their economic usefulness, and yields of hi-proof nectar, also have valuable collectible potential as well as (in a pinch) being a good source of scrap, making for an SOV-triple play!

A Grove of Olive Trees is romantic. It is also beautiful. It’s pure economic yield, while less-than-lotterific (unless depicted by van Gogh as the one here), hasn’t prevented the earth on which they stand from appreciating, albeit in fits and starts, and certainly not without hiccups that often last as long as an entire generation. Of course, I am not qualified (as a northerner) to wax too lyrically about their bounty and positive externalities, something I will leave for Charles Butler’s investment manifesto, in this most wise and overlooked of posts.