âLehrman was forced to go from town to town,â reported the New York Times, âlooking for older stores in downtown areas where landlords were more desperate for tenants. Having found a site, he and his partners would devote a Saturday in painting and remodeling (usually spending less than $10,000) and a Sunday to stocking shelves. On Monday, the store would be open for business.â
â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â October 17, 2023 |  [View Online]( |  [Sign Up]( Risk! âGames are all about taking risks.â â James Altucher Dear , In 2013, we took a film crew to Greenwich, Connecticut. At the time, the stock market and economy had ârecoveredâ from the Panic of â08, and we were making a film about ârisk!â. We wanted to know how the bailouts and the Fedâs quantitative easing program were impacting entrepreneursâ abilities to factor risk into their decision making. It was kind of a heady subject, but our premise seemed relatively clear to me: if the Fed and Treasury were the âbuyers of last resortâ for mortgage securities and US Treasuriesâand effectively bailing out Wall Street banks for a slew of bad decisions resulting from ignoring riskâwouldnât that just encourage banks to do it again? CONTINUED BELOW... POWERED BY WEISS RATINGS Forbes: AI Will Create First Trillionaires Bloomberg says AI will help investors make billions of dollars. But our research tells us that the kind of AI we cover in our [urgent AI briefing]( going to do much better than that. Forbes says the new AI breakthroughs will not only save billions of lives â¦They could also create the world's first trillionaires. To learn more, [watch now>>]( CONTINUED... The bailouts in our opinion at the time were taxpayer sponsored âfree passesâ on a slew of bad decisions. We had already surmised quantitative easing (QE) and below market interest rates were going to create âmoral hazardâ in the economy at large; sending signals that everything was hunky-dory and money was free. We had also forecast it would lead to historic inflation, albeit about a decade too soon.   Either way, we wanted to know how bond traders and money lenders on Wall Street were pricing risk at the time. Weâd met Lewis Lehrman through our friend in Congress, Ron Paul. Dr. Paul and Mr. Lehrman were co-authors of the minority report of the 1982 U.S. Gold Commission, over which Rep. Paul presided. (The report was entitled The Case for Gold, which we also published at the time, through Laissez Faire Books.) Lehrman had also been the managing director of Morgan Stanley and founder of his own investment firm L.E. Lehrman and Co. As such he seemed uniquely suited to help us understand how the massive 2008 bailouts and subsequent QE programs were affecting risk-assessment in the boardroom and on the trading floor, now that the markets had stabilized. We met at Lehrmanâs home in Connecticut. A modest farmhouseâat least by Greenwichâs standardsâand horse stable. Surrounded by rolling hills and apple orchards, just north of the bustle of New York City, miles away from the nearest strip mall.Â
Addison, Lew Lehrman, John Popola and Josh Myers at Lehrmanâs home in Greenwich, CT, April 2013 (Source: Addisonâs iPhone) That was ten years ago. Much of the history of what QE and ZIRP will have wrought at the time has already been etched in history. I was reminded of the conversation we had this morning because yesterday brought news Rite Aid declared bankruptcy yesterday. The third largest pharmacy chain in the U.S. behind Walgreens and CVS cited lawsuits over selling opioids as the major reason for needing to restructure its debt. Second to opioids, same store theft and safety of their employees were mentioned as reasons to shutter as many 200 hundred stores. The Rite Aid Corporation was an outgrowth of a family wholesale grocery business in central Pennsylvania, Louis Lehrman & Son, founded by Lew Lehrman's grandfather Louis and expanded by his father Benjamin. Lewis spent his teen years working in the family store. He later worked part-time and on holidays while paying his own way through Yale and later still, Harvard. In 1962, the family biz, under his fatherâs direction, began opening health and beauty stores. Finished with his studies, Lehrman joined the company full-time in 1964. The first Rite Aid pharmacy was opened in New York State later that year. âLehrman was forced to go from town to town,â reported the New York Times, âlooking for older stores in downtown areas where landlords were more desperate for tenants. Having found a site, he and his partners would devote a Saturday in painting and remodeling (usually spending less than $10,000) and a Sunday to stocking shelves. On Monday, the store would be open for business.â Rite Aid successfully IPO-ed in 1968. The cash infusion help with expansion. Until he stepped down as company president in 1977, Lehrman was the companyâs largest stockholder. During our rather candid conversation, Lewis lamented the direction of the economy, the government, and the unimaginable growth in national debt. None of it could have happened, we believeâthe bailouts, quantitative easing, continued demise of the dollarâif the Bretton Woods exchange rate had not been dismantled in 1971. Alas, Mr. Lehrman didnât want to talk much about his childhood working at the family store. And only waved his hand politely dismissing the question when we asked if he could expound on his years as Rite Aid president, overseeing its early expansion. Itâs really too bad. By this point, we were just as intrigued in Rite Aid as an American success story as we were our main premise of measuring risk in the ânew normalâ post-bail out America. CONTINUED BELOW... POWERED BY SAFE HAVEN METAL The Secret Wealthy Insiders Are Using To Escape The Stock Market Why are central banks "panic-buying" gold at historic rates? A new consumer guide exposes their secret plot. Revealing how banks are legally protecting themselves and supercharging a new gold rush before it hits the floodgates. A massive opportunity to protect and grow your retirement is unfolding. [Click here before your cash is officially obsolete..]( CONTINUED... At the time of its bankruptcy, yesterday, Rite Aid had grown to over 2,000 stores in 17 states with over 45,000 employees. The company had $24 billion in revenue in fiscal year 2023, filling 200 million prescriptions in the past year, but is still being gutted by crime and the opioid epidemic. Walgreens and CVS have also shared their plan to close stores in risky neighborhoods, causing the New York Times to lament the creation of âPharmacy Dessertsâ in many communities. Thereâs a lot to cover this week. Rite Aid is but one of at least 517 high profile bankruptcies in 2023. At the current pace this year will outpace the number of bankruptcies in 2020 at the height of the pandemic lockdown. And clock in the second highest number since 2010âs 827 business to close doors. Corporate bankruptcies, the opioid crisis and random crime all figure highly in the forecast weâve made for 2024 in [The Great American Shell Game]( Itâs worth a listen, Addison Wiggin P.S. Weâre also digging into the expanding property and debt crisis in China, with new details of Country Gardenâs failure to meet $7.6 billion in payments through September. Following on the heels of the bankruptcy of Evergrande, Chinaâs largest real estate developer, Country Gardens woes signify âdeepening distress in Chinaâs housing market,â writes Wiggin Session alum Peter Goodman in the New York Times, the very âintersection of finance, construction and household wealth.â Over the last 10 years, Chinaâs firms have invested more than a trillion dollars in huge infrastructure projects known as the âBelt and Road Initiativeâ. That spending is coming to an end. âMore than 150 countries have received Chinese money and technology to build roads, airports, seaports and bridges,â Roland Rajah, of the Sydney based Indo-China Development Institute, told the BBC recently. âChinese commitment to these projects may start to suffer if economic problems persist at home.â "Now Chinese firms and banks won't have the same financial largesse to splash around overseas," Rajah says. "Big exporters such as Australia, Brazil and several countries in Africa will be hit hardest by this." So will the United States, both as an exporter of goods and resources to China and as a consumer of âcheap stuffâ made there. The Chinese slowdown and internal debt-deflation issues, we expect, will have as resounding an impact on the global economy as the Great Depression did globally. We discuss the parallels of the two historic debt crises, [here]( POWERED BY DEMISE OF THE DOLLAR The Daily Missive from The Wiggin Sessions is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to The Wiggn Sessions delivering daily email issues and advertisements. 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