"The only reason a great many American families don't own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments"
Mad Magazine

I guess I should have known that it was coming... Yesterday, my three year old son who has previously developed an uncanny ability to separate Treasury's Hank Paulson and Neal Kashkari from each other despite their nearly identical haircuts, and who now knows that Barney is not only the name of his favorite toy, but is also the name of the infamous Chairman of the Financial Services Committee Barney Frank, said to me very clearly, that he now needed a bailout from his house cleaning duties. I simply could not believe it- if a three year old now knows what a bailout is, where do you think is our capitalist system is heading?

Emboldened by the ever growing billion dollar numbers thrown at us every day by the mainstream media, and the seemingly bottomless demand for US government debt, everyone and their mother is now asking for a bailout of some shape, size or form. First it was Wall Street, then the Big Three, followed by city of San Diego, state of California etc...

Yesterday, Wall Street Journal reported that homebuilders have now joined the banks and auto makers by making a plea for an additional $250B stimulus package called "Fix Housing First". They are arguing that instituting a large tax credit of up to $22,000 for home purchases will somehow help to cure the fundamental problem of the current crisis- declining home prices and thus will help the economy to recover faster and help the struggling consumers along the way.

Yea, right! We've heard this story before- they are obviously doing it simply because of the philanthropic concerns about the struggling homeowners and consumers?! My brain simply refuses to comprehend why in the world anyone in their right mind would propose a policy designed to stimulate constructing more new homes at a time when inventories of the unsold ones are at the still hitting all time highs? Wouldn't we all be better served if homebuilders instead stopped building for a year or two? But, I mean, if my son needs a bailout, why wouldn't homebuilders qualify for one?!

I guess we now all wake up wondering who is going to be asking for money next? There are so many industries struggling that I am afraid I might have overlooked a few in my "important industries to bailout next" list below, but you will have to forgive me as my patience has simply run out for now... To create the list below I looked at some of the sectors that have declined the most during the current crisis and I hope you will find my ideas at least as useful and rational as most of the other ones out there. At least I spend some time thing through mine...

I say let's start with the gaming industry. One could easily argue that Las Vegas titans like LVS, BYD and MGM are way more qualified for a bailout than Wall Street ones. Because while their basic business models are quite similar (both are a legalized form of gambling), at least average visitors to Vegas are warned ahead of time that they should expect to lose money, while Wall Street is still feeding their frequent visitors/retail investors that normal "buy, hold and earn 9% returns in the long run" routine is the "sure bet" in the long run...

After that, I suggest we move on to the entertainment sector. It is quite clear that many of the well known brands like PLA (Playboy) and LGF (Lion Gate) are suffering from the same forces that are now destroying Detroit- unionized workforce, negative cash flows and inability to compete with more advanced players. If you ask me- throwing a lifeline to the Bunnies is a much better investing decision for the government as we at least know that PLA's medical liabilities will be largely limited to the working off the effects of plastic surgeries instead of the golf induced disability epidemic...

Obviously, we cannot and should not forget to bail out the struggling firearms industry. Smith and Wesson (SWHC) seems a much more prudent bet in the long run than California. I know that Mr. Governator is a very tough and forward looking budget fighter, but I would still argue that with all the turmoil, wars and fears out there, demand for shotguns is almost certainly going to outperform the growth in property tax revenues of the Inland Empire.

And last but not least, I say that instead of throwing a lifeline to nation's largest homebuilders we should ask Uncle Sam to buy some preferred stock in nation's largest funeral and cemetery service providers. While we almost certainly have plenty of houses already built up to last us for at least a few more years, funeral home companies like SCI and STEI, not only have a more predictable and secure revenue stream, but they also seem to have a solid growth potential with millions of baby boomers no longer being able to afford decent health care or peaceful retirement in general...

I hope you get the point... Let's all get together and stop this socialist "bailout madness" and focus on what's really important- reducing wasteful spending, creating jobs and recapitalizing the financial system in a proper/accountable way. Stopping the media from infusing the "bail everyone just because they need money" doctrine into the heads of our nation's young generation is equally important as personally would have never the original communist society to join the emerging "New Deal" one.

Please feel free to forward this message to your senator and tell him/her, that while we realize that we really did not have a rational choice, but to rescue our large money center banks like BAC, JPM and WFC because of the potentially immediate collapse of the entire Capitalist system as we all knew it, we should now all be prepared to say "no more" to anyone who hasn't learned their lesson...

Stay safe out there, I know it's not easy but please do so if you still can, skepticalcapitalist@gmail.com