TAL Money Memo 3-18-09: Murphy is a Money Manager

Mr. Murphy's Law says, "If anything can go wrong, it will go wrong"

(Sometimes known as the Introduction to Samuelson's book on Economics).

1st Economy Amendment
If there is a possibility of several things going wrong, the one that will cause the most damage to the economy will be the one to go wrong.

2nd Wall Street Amendment
If you realize that there are three possible ways in which Wall Street can screw something up, then a fourth, unprepared-for way, will miraculously appear out of thin air from the Treasury Department.

3rd FED Amendment
When something breaks, the FED will attempt to break other things in direct proportion to their value.

4th Congressional Amendment
The failure of a government financial bailout will not be publicized until after the next Congressional election.

5th FUBAR Amendment
If the FED does fix one part of the economy, publicity over that success will drown out the other failures that are simultaneously occurring.

Furschluginer's Time Rider
Anything financial that can be delayed to make the economy worse, will be.

Gomper's Anti-Murphy Corollary
If workers are about to get more of what they want, the roof caves in.

Barrymore's Computer Presumption
The probability of anything happening according to a financial manager's computer is in inverse ratio to its desirability.

Bitburger's Law of Worms
Once a government official opens a can of worms, the only way to re-can them is for the official to buy a much larger can… or cans.

Occiput's First Stall in the Barn Razor
The easiest solution is the last one the Treasury should chose.

The "W" Political Proviso
Do not assume malice in financial affairs when stupidity will suffice.

Parkinson's Annoying Probability
Adding manpower to a government project that is behind schedule will delay it further, until just before the next Presidential election, when it will be declared a success, and therefore a strong prognosticator for reelection.

Examples of the Laws of Murphy in action:

1.   Law of Government Stimulation Packages - After Congress's hands have become bribed with financial largess, their noses will begin to itch and they'll have to go to the voters and blame somebody else for it.

2.   Law of FOX News Publicity - Small earmarks, when passed, will create the largest amount of publicity based on their high number alone.

3.   Law of AIG Outrage Corollary - The probability of AIG actions being reported upon is inversely proportional to the stupidity of their act. (Giving out $165 million in bonuses gets angry publicity while sending $66 billion to 9 big U.S. and foreign banks receives no notice at all.)

4.   Law of Spendapalouza Bailouts - If Congress creates a large enough financial bailout, geezer voters will be the only ones smart enough to recognize that their grandchildren will be the ones paying for it.

5.   Law of the Shared, but Shredded Alibi - If bankers create an interlinked financial system that controls enough politicians, they will all have to be bailed out or all the politicians will get thrown out of office.

6.   Law of the Naming Mutability - If you change your name to a bank, you can still act like a hedge fund, manipulate markets, take huge bonuses, and receive Treasury bailout money to boot. (MS, and GS)

7.   Law of the British Bank Bath - When a British bank has become insolvent, and crowds are storming the doors trying to get their money, the Secretary of the Exchequer will talk tough. Then he'll deny the bank money, stall, lie, and then guarantee all the bank's deposits.

8.   Law of Madoff Encounters - The probability of having your money managed by Bernard Madoff increases dramatically when you are trying to impress someone you envy. (The result of the encounter will be similar to what will happen if you are female and you have gone out to the market with no makeup and wearing dirty, smelly clothes…)

9.   Law of Theater Irony - Strong financial institutions, which didn't do stupid things, will be bought by stupid financial institutions that have received government money… for being stupid.

10.   Law of Bailout Humor Interpretation - If there are only two people eligible for a bailout, the dumb one will get the money, and the smart one will either go broke, or be bought by the dumb one. (PNC)

One should ponder the straining consequences of Murphyish financial bungling. As soon as you find a product that will protect you, like gold or silver, the government and the banks will punishingly tax and regulate the mining company for delivering ounces. And suppress the price of gold on the Comex. And have the Mint stop selling precious metal coins. And jawbone with a lot of anti gold propaganda…

THEREFORE, the Financial Foghorn offers his "Coming Troubled Economic Times Strategy" - a corollary to the Irish belief in a pot of gold at the end of a rainbow. Perhaps Americans should believe in a pot of gold coins and mining shares. Think gold, not green.

(The author has no long or short position in AIG, MS, GS, or PNC.)