- By Bill Bonner
"Give it the works," Jorge yelled.
The dust billowed up. The cows whined, moaned and honked.
We reached for our clippers.
The results of "the works" were already spread around us. There was blood splattered on the stone walls and wood barriers. The smell of burnt hair and hide was in the air. And on the ground were triangular pieces of cows' ears, cut-off horns, and testicles in various sizes. One of the dogs had been eating the testicles as fast as they were tossed out to him. But he had had enough. Now they were just lying in the dust.
When the order went out for "the works," the whole team moved into action. As the least competent member, our job was to clip the cows' ears. Done right, on the lower part of the ear, the cow barely seemed to feel it.
Meanwhile, Jose brought over 2 syringes, injecting a dose of antibiotic as well as some anti-parasite concoction. Close behind him was Javier with the branding iron. He brought it down on the cow's flank firmly, until smoke rose and the brand was clearly planted. Jorge was already on the job by then. He opened up the testicle sacs with his Swiss Army knife, drew out the testicles themselves and cut them off, throwing them off to his right. There, until he had eaten his fill, his dog, Sintenella, snapped at them, often getting them before they hit the ground.
All day, yesterday, the cattle ran through the "manga."
"These are mountain cattle," Jorge explained. "You can see the difference. They're thinner. And they're a different breed. Criollo mixed with some of our Braford. And they have horns.
"Our own cattle we usually castrate earlier and we take the horns off when they are little. These animals get pretty big before we get them in here."
They came to us in payment for letting them graze on our land. The system is so complex, traditional and nuanced that even after 8 years we still don't understand how it works. There are cattle up in the mountains - thousands of them. Jorge seems to know where they are and whom they belong to, more or less. But how we're going to get along after he retires?
Today, everyone is on vacation here. It's "May Day" - the international worker's holiday.
But our labors continue. Fortunately, our vocation is also our avocation; "love and need is one," as Robert Frost put it.
So even on this holiday, we continue trying to understand what is going on - if not on the farm, in the economy.
First, we recall with some satisfaction, that we told readers at the end of last year that a good trade would be to 'sell the US, buy Russia.' Naturally, this annoyed some readers, who saw something un-patriotic in investing in Russia. But the advice - or, we should admit that it was only an idea - proved good. So far this year, Russian stocks have gained 39%. US stocks are more or less flat.
How did we know Russian stocks would go up? Of course, we knew no such thing. All we knew was that they were preposterously cheap and that most investors based their judgments on very little real knowledge of Russia. Extreme valuations - either high or low - are usually wrong. And they are most probably wrong when they are mixed with political nonsense, media claptrap, and popular prejudice.
As for the US stock market, we judged it preposterously expensive. Not that it couldn't become much more expensive. But every day brings more evidence that 1) the recovery is more fake than real, 2) the US is in a long-term growth downturn, and 3) stocks are getting closer to a nasty bear market.
Jeffrey P. Snider tells us that it is very unusual for final sales to go down. But that's what happened between the last quarter of '14 and the first quarter of '15. And this wasn't the result of some adjustment. This was the real thing, unvarnished and undiluted:
It has shifted the economy from the hard work of saving and investing to the cheap tricks of speculation and financial engineering:
David Stockman explains:
And now, our own research department believes that US stock market investors are being led into the manga. "Give 'em the works," a voice yells.
More on Monday.
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.