An interview with Ray Dalio in Barrons is getting a lot of buzz among independent investment advisors. Ray thinks the entire debt structure of the world must be re built. There is more debt than there is asset value to support it. Asset values continue to crumble but the debt stays the same. The response from governments has been to print more money which has no hard asset value behind it, it is fiat money built on the idea that we will accept it just because the government says it has value. Gold and silver have risen in value again, will they keep going now?
Meanwhile I notice students watching sports events on the tv in the big room. (as opposed to cnbc or the history channel…..) Some player named A Rod has apparently taken steroids but got the big bucks for hitting a baseball. But what we have is a bet on an 'asset; the baseball player who no doubt supports debt on the entire team and a large stadium. No doubt the entire community bet on the stadium. Come to think of it, pro sports looks a lot like the stock market on the way to 14,000. Everyone is betting that the demand for ticket prices is inelastic, fans will continue to pay up. And so owners pay more money for players and the inflationary spiral continues Arlington and Jerry Jones are building a $1.1 B football stadium. If break even as we study in cost accounting is fixed cost divided by contribution margin (sales minus variable cost) such a stadium will not pay off in multiple lifetimes. Yes the super bowl is coming in 2011. But look how few advertisements were sold on the 209 SB and the recession is just getting underway.
As Kenny Rogers observed you gotta know when to hold em and know when to fold em.
Professor Elam 
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