What Do Morals Give Us?

One of the long-term regular contributors on the private finance discussion site WallStreetBear.com - 'WRS' - just posed the interesting question: 'Well, what do morals get us?!'

Great question I suppose, given the present context for banking and finance and market capital.

He made much the same sort of points about equities rising for absolutely no good reason, errant banks endlessly bailed out by the taxpayer, the Fed not giving two hoots about moral hazard... and on and on. 

Egerton Hotel afternoon tea, in
Knightsbridge, London

And this last weekend, I found myself - as you do over the holidays - in the midst of the richer side of the family, several members of which are key 'players' in the high-end luxury automotive dealer and distributorships around the city here. Casting my eye over price lists here and overseas, I came to the conclusion (to myself only, of course) that high-end car prices were a reflection, not of the design inputs and the manufacturing costs and so on, but of the insanely fast and steeply-rising prices of London real estate! London, as you must know, is the money center of the super-wealthy and tax-savvy people of the world. It's not New York; it has never been New York. 

One fellow I vaguely 'know' maintains an horrendously expensive pad in Knightsbridge, but I don't believe he's been there more than once - ever - and then for only a couple of weeks.

To the best of my knowledge not a single actual functioning business he's ever been involved in has ever made him any money but because of his father being in a government somewhere, and access to bank lending without too much cashflow scrutiny, he has managed to 'make' literally tens of millions of pounds from London real estate. He lives part of the year in Dubai.

And he owns several Lamborghinis.

Is this really worth $800,000?
I don't think so...

When I bought my first Lamborghini, back in the 1980's, it cost me a bit over $40,000. Today's Aventador is going to set a buyer (although not me) back over $750,000.

What has changed? Prices of good steak are actually lower. Dividends are meager. Yields are worse.

I watch television programs about the supposedly 'super wealthy' and I can't imagine a more boring lot. It's ridiculous. I mean there's nothing in their heads. Their taste (just look at the interior decorating styles) is horrible. Their conversation is virtually that of illiterates with a lot of money and pretension to education. And then they get enthused about the prices of real estate.

This week a couple of old stockbrokers mates are finishing their Sydney-to-Hobart yacht races. I swear I heard old Craig Carter - a name from the old go-go-fund days - waxing lyrical about how 'grueling' the yacht race is... 'Grueling?!' Surely that's not a word taken from the noun 'gruel?' What on earth would he know about gruel?! He must have heard it off one of those Christmas season movies...

The thing about these kinds of rich people, is this assumption and belief they have that everything else is also open to them, so long as they just have that 'big smash' as the bookmakers call it. And the only game in town is this fall-off-the-log billionaire gift of the never-ending rising of the London property market.

Altara by Johan Vilborg (Nigel Good remix)

One of the people at this family function I was at, asked me what was on my digital playlist, and I quoted them a few tracks and artists, and played one of them, and you could see by the facial expression it was outside of their comfort zone.

And I realized that there is a stark difference between various classes of people's minds on this planet. I really don't think he understood what he was listening to. But for me, if you asked me, which is more valuable, this packet of digital information in a sound form that is available to some human beings - and a fifty million dollar apartment in Knightsbridge - it's 'no contest.'

Morals affect your brain, especially when society is progressing, as it has done every now and then in the past. What defines wealth is of course, money, but in the end, it's survival too. And when the waters rise, the dumb sink and drown. Most people today can't see that the waters are rising. I could have talked to him about Schumann resonances and stuff, and that would really have lost him.