On Sunday, Bloomberg News reported that bonds issued by Warren Buffett’s Berskshire Hathaway are trading at “3.5 basis points less than Treasuries of similar maturity.”  In laymen’s terms, it is now more expensive for the U.S. Government to borrow money than Warren Buffett.  The implication here is that your money safer at Berkshire than with the government.

Let me get this straight; some citizen, who is bound by U.S. tax laws, runs some corporation, which is subject to U.S. tax laws, and the market is indicating it to be a safer place for your money than the authoritative body that controls the very same tax laws.  Do people really think this makes sense?  The “United States is losing its AAA rating” AKA the “China doesn’t love us anymore” argument is irrelevant here.  This screams arbitrage convergence play!  The gap between the two will close/invert.  Meaning, yields on Berkshire will go up and/or yields on U.S. Treasuries will go down.  Construct accordingly.

Disclaimer: The sooner Obama starts sexing it up, the sooner the gap will close.

Can someone explain to me why everyone wasn’t fired?

SEC lackey (anytime 2000-2008):  “People are saying Madoff is running a Ponzi Scheme and apparently have proof… oh, you talked to Bern? and he said he isn’t?  Alright, never mind then.”

And more importantly, why doesn’t the torch bearing, general public seem to care?  People are all worked up over banker bonuses, regulation, John Mayer’s racism, and yet don’t seem to mind that the SEC completely shit the bed here.  Their level of negligence had to be criminal.

SEC’s mission statement:

“….protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”

FAIL.

Someone needs to be canned.  As an ironic aside, why does everyone want more regulation?  We have plenty, but those in charge of regulating (SEC monkies) are too stupid to be much of a help.

Investing in gold is completely stupid.  I get it… your money market account is returning 0.0% annually… you see those pretty graphs of the performance of gold, and it gets you hot and bothered.  Common pro-gold arguments include inane phrases like “store of value,” “inflation protection,” “limited supply,” “shiny,” etc.

All bullshit.  Why is gold valuable?  To have value, something needs to have some utility. Gold is absolutely useless. It is too soft of a metal for use in production. A long time ago, we apparently invented a use for it; to exchange for other things.  However, we now have a far better, relative system for transactions. Its called….wait for it…. MONEY.

I’ll allow you its “rarity” due to a finite supply.  You know what else is rare?  My underwear without skid marks. Any takers at $1,100/ounce?  Article over.  One-nothing, me.

Have fun with your bubble.