Word comes today that you find the nearly $20 billion Wall Street paid itself in bonuses (boni?) this year excessive and “shameful.”  I can see where you might think so, unaccustomed as you are to the needs of moguls, executives, lawyers, bankers, traders and other folk whose lifestyles require an annual infusion of cash to keep them going.

There’s so much suffering going on across our nation right now. The maintenance of this form of compensation helps prevent its spread on a much wider scale.

My personal bonus is only a small fraction of that total sum, of course, topping out at no more than several hundred million in this down market. As a consequence I and those like me are tightening our belts and preparing for a long, cold recession. There are those I know on the Street who are right now making plans to eat at home on Friday nights and foregoing the mid-winter vacation to Gstaad. 

My friend Armbruster is a case in point. His base salary is only $1.4 million per year. That may sound like a lot, but it’s well under a million after taxes. On that, he must:

• support two ex-wives and their no-good, live-in boyfriends;
• pay for colleges for his own children and four step-children;
• maintain mortgages and maintenance fees on residences in New York, Los Angeles, Aspen and (for his aging mother) Cabo san Lucas;
• purchase and insure six automobiles for himself, wives, children, etc.;
• treat the extended family to vacations and holiday festivals that are the primary means of keeping members of the extended clan cognizant of each other’s existence;
• have an occasional bit of fun himself.

All without touching his principal, which is invested in financial instruments that, while solid enough, are not bullet-proof in this environment.

Is it any wonder that his face will droop when he sees that his bonus, for which he worked no less hard than last year, has fallen into the mere seven digits? What will his cash flow look like in November?

So please, Mr. President. We in the business community are behind you 100% in your efforts to save our economy with no help from the former party in power. But as you go, please be sensitive to the human cost that you may exact from those who can least afford to bear it.

You’ll have to excuse me this morning. I’m very annoyed. Last night when I got home from work I received another communication from the insurance company that handles medical for my corporation. They’re very, very good at communicating, this insurance company. What they’re really not very good at is ever paying a single nickle in benefits to policy holders, at least without a knock-down, drag-out fight.

I can honestly say that for every check they send out, they produce ten other mailings – excuses, requests for additional information, reports on excuses and, of course, rationalizations.

Yesterday it was a long document demanding more information on my wife, who has been covered by company benefits for many years now. All of a sudden, guess what. They don’t seem to know who she is. Where does she live? Where was she born? Does she have secondary insurance? No explanation is given for this institutional amnesia, but I can think of one: she filed a number of dental claims a few weeks ago. This latest salvo is designed to put off the inevitable (insufficient) payout for a few weeks or, if somebody very skilled it on the desk in Connecticut, months.

At the same time, I was informed that my 5 AM visit to my local Emergency Room last fall was being denied because the ER physician was out of network and, you know what, it wasn’t an emergency anyway. This was surprising to me, considering how many really scary tests they gave me before they felt comfortable to send me home. I’m fine now. But I certainly wasn’t fine then. I think if a person is admitted to the ER, kept there for six hours and only released after certain terrifying tests came back clean, they had an emergency.

What kind of people make these decisions? And if somebody were to throw them out of a window, would their injuries be covered?

You could make the case that this era has produced possibly the worst bad guys in business history. Think about that for a minute. That’s really saying something. They’ve got a lot of competition. Carnegie and Frick, who shot their own workers. The guys who fomented the Teapot Dome, whatever that was. Who remembers? 

Somewhat more recently, during the days I still wore suspenders and power ties, there were a lot of bad guys, too. Many are philanthropists now, just like Carnegie and Frick, come to think of it. God bless ‘em and the work they do, but they were pretty bad. The fad then was to rake up companies as if they were fish in a net, gut them, and profit from the asset. It was called, in a most Orwellian twist, “the democratization of capital.” Most of the clever little miscreants got away with it, but a few got crazy greedy and messed it all up for the rest of us normally greedy people. There were a few really gross ones. Dennis Levine, for instance. Insider trading? Seems so mild now. 

Ours seems worse somehow. Just look at the harvest! Dick Fuld, the former head of Lehman Brothers, just sold his $13 million dollar Florida home. To his wife. For, reportedly, $10. You read that correctly. Ten dollars. You have to excuse me, but I just have to say… that’s so cool. What bravado! Mess with Dick Fuld, will you? Well, Dick Fuld has a few tricks up his sleeve! And the guys from GM, Ford and Chrysler, who flew to Washington to ask for money, each in his own private jet? Now Citigroup, which took a huge bolus of bailout bucks, is said to be purchasing a $50 million jet. Amazing. I’m sure there are a host of excellent business reasons they are completely justified to do so. I bet they will even save some money, in their minds. But really. You’ve got to hand it to them.

Then there’s Bernie. I really enjoyed the piece in last Sunday’s New York Times that did a thorough mental D&C on him. It was very entertaining. I’ve always thought that it took a certain kind of psychopathy to succeed in business. The bigger the nut, the better he or she does, pretty much. There are exceptions, of course. But Bernie is such a huge, juicy example. The sharp kid who didn’t do so good in school. All the smarty-fartys went to Harvard and Yale, and he had to go Alabama, which was fine, but not so Ivy League. Couldn’t take it.  After a year, went back to Long Island and attended Hofstra at night. He would show them! And he did, too. Put it over on everybody for a long time. Really stuck it to them all in one way or another. Even now, totally busted, and when he goes outside there’s a crafy, insouciant, twinkly, beamish thing going on. Something… proud. Fifty billion dollars. What an achievement in bad guy history. 

And then there’s the rest of us. All the Bernies in the world couldn’t exist without the support of the brokers, bankers, regulators, credulous investors, and enormous bigshots in their own right who make up the neural network that makes Bernies possible. 

But are we the worst? There’s a lot to consider. Take the guys who run the Chinese railway system, controlling the supply of tickets with violence when necessay, stabbing people, beating them upside their heads. Saw in the LA Times. That’s bad, if not quite as sophisticated. Still, they’re no slouches. I mean, putting poison into children’s toys, toothpaste marketed to kids, and pet food? That’s seriously not good, I admit it.

At the end of the day, however, I’d put our guys up against theirs anytime, at least for now. They’re coming up the ramp. But any nation that can produce a Rod Blagojevich has nothing to worry about in this particular contest.

Perhaps you guys can help me understand something.

Word comes today from a most credible source that the failure of smaller banks may soon lead to more consolidation and mergers in the banking industry. One analyst told the New York Times that 200 to 300 small banks might fail in the near future, and be forced into mergers, presumably with larger entities.

This is a solution?

Didn’t we just see what happened to Citigroup (C) and Bank of America (BAC)? Aren’t both now being deconstructed due to unsuccessful, if not heedless, acquisitions? Haven’t empires from Rome to ITT fallen into rubble as a result of getting too big, too fast? And haven’t we seen ample evidence of that fact as recently as this morning, as the implied value of AOL ratchets down in the wake of a Google writedown (GOOG)?

This is not to say, as some have contended, that all mergers and acquisitions are bad. When two strong entities come together, it’s a beautiful thing. But ugly monsters made out of dead body parts yield the expected results, usually ending when a group of townspeople with pitchforks chase the poor creature into a barn that is then burned to the ground.

Certainly the merger of these bankettes, which are now suffering from being in the same room with the commercial real estate market, is preferable to their failure.

But is the future truly served if the muscle of capital does its usual thing, providing fees to all the lawyers, MBAs and other financial types as they once again set up great hulking behemoths destined to lurch over the cliff in the next high breeze?

From: Investor Relations
Sent: Thursday, January 22, 2009 9:26 AM
Subject: Morning Security Analyst Notes

Overall Industry

• Mark Putznick at Boardman Frakes (which reported a fourth quarter 2008 loss of $4.97 per common share) commented on the U.S. revenue environment stating that everything will decelerate significantly during 1Q’09, although “visibility into the overall picture is murky.” He downgraded everything he could get his hands on and then went out to lunch until 2:45 ET, at which time he will once again file a report on the visibility at that time.  

• Roberta Sump at Sprotz Wishnik (which posted a $15 billion loss in the fourth quarter of 2008), issued a note on Barque & Whinny Enterprises, stating that the market seems relatively solid for fictional companies, and that since the firm has yet to produce a single ascertainable product or service, she is maintaining her Buy rating, with a caveat that should the company go into production on anything in the near future, she would have to re-evaluate that position on the stock.

• Hawk & Loogie Inc. decided to exit all of its businesses except those that directly pertain to the compensation of its senior officers.

Segment Analysis

• Horatio Mungwiener at Flotsam Jetsam (which has been recently acquired by Dewey Cheatham & Howe and is being rebranded into something of overweening cuteness in the coming weeks) upgraded Hirsute Valley from Get Rid of It to Hold Onto It Very Gingerly, citing an improving discursive gas bubble in its fiduciary gorble, more apparent recession resiliency, visible smoothness in its outstanding carbuncle, and potential upside from asset sales and tax assets. While offering this improved outlook, the analyst cut his price target on the stock to $.40 per share from $43.40 per share.

Market Commentary

Wall Street zoomed up, careened down, leveled off, then fainted in midair after receiving the bad news that somebody was still employed somewhere.  

Additional Notes:

• Housing starts didn’t even get started, which was disturbing to many analysts, while at the same time unemployment claims skyrocketed, which went a long way toward cheering them up. 
• Across the operating sector, a number of actual firms reported profitable quarters, and were immediately punished by analysts for not meeting their estimates.
• The number and length of security analysts reports covered by this daily e-mail grew by 14% y-o-y. “We’re going to keep on doing it until somebody tells us to stop,” said Nestor Farquahar of Wink, Blink and Nod (now in receivership).

When I was a lad, my summer camp took us to a farm. We were mostly city kids with a few suburban nerds like me thrown in. We petted the goats. We took a look at the cows being milked by huge machines. Some of us even got to ride on a pony. And then, for the piece the resistance, they took us all back behind the barn to watch a chicken get its head cut off. Why? You tell me.

The farmer explained to us that even after its head was cut off, the chicken wouldn’t know its basic status, and would continue to run around for a while. He seemed to feel this was interesting, if not amusing. So he lined the chicken up on a very scary, very scarred block, and chopped its head off.

Boom! There was a mighty fountain of blood and, as foretold, the surprised chicken hopped to its feet and began to run around the yard. Some people laughed to see such sport. Others simply watched in amazement. After a while the erstwhile chicken stopped running, stood still for a while, then simply tipped over onto one side and, after twitching for a couple of seconds, lay still. Its body had finally recognized its true condition. An organism can live without a brain for only so long.

Which brings me to our economy. About 18 months ago, it seems to have lost its head. Who chopped it off is a matter of conjecture, although all those sharp financial instruments invented by Wall Street were certainly on the scene. One thing is for sure, though. The poor thing is still running around the farmyard without one.

Every day I get to work and see a bunch of news stories from august business magazines, Web sites and papers, tracking various developments, and several dozen chattering analysts reports, all of this activity attesting to the fact that the bloody victim is still racing around as if its head were still on its shoulders. Right now, at this writing, I believe it may be possible that we’re in the phase where the thing is just standing there in shocked stasis, preparing to keel over. It certainly feels that way.

On the bright side, history shows us that it is possible for a chicken to live a long time without its head, as long as a tiny portion of its autonomic system remains intact. It’s never really healthy again, but it can hang around a long time in that condition. So maybe all is not lost.

There is no record, however, of a chicken in this extreme state having its head actually replaced. Who knows, though? If some of our best minds put their heads to the task, maybe it can be done.

We can always, I suppose, enjoy the audacity of hope.

Congratulations, Sir. Welcome to the best/worst job in the world. You wanted it. Now you have it. Fortunately, there are quite obviously no dearth of people willing to help you do it. In this category I not only include the vast team of economists, strategists, political tacticians and assorted experts you have already assembled. You’re lucky enough to possess an entire Verizon-esque network of folks willing to tell you what to do and how to do it. You need to listen to every single one.

For instance, you need to listen to Wall Street. Wall Street knows what to do. Even after all the difficulties it has visited upon our economic system, we’re fortunate in the number of economists, bankers, brokers and investment scientists who have a variety of good advice for you to consider. Just look at all the business sites across the Web for a sampling of their extremely varied opinions. Listen to all of them.

You’ll also want to listen to the electronic and print media. There are so many smart people writing and televising their notions of what you should do. The good news is that the majority of them are 100% with you – just precisely the way they were with Mr. Bush for seven and a half years of his term. How smartly they turned on a dime in the last six months! They’re derisive of him now, you bet. How could anybody have paid any attention to the former president, considering what a fool he was on SO many levels!? On the other hand, you’re much better and smarter, Sir, the media recognizes that bigtime, and has any number of thoughts on what you should do to cement your place in history with them – until they turn against you. To avoid that as long as possible, you should listen to them, too.

Don’t forget all the folks in Congress, of course. They’ve done such a smashing job in the last decade or two. Your colleagues in government on the other side of the aisle, for example, would like to deepen tax cuts on the upper ends of the economic scale, to make sure that whatever is left to trickle down from up there continues to flow as reliably as ever. That sounds like a good idea to a lot of people in business, for sure, even those who were your big supporters.

And don’t forget about all the bloggers out there. Right now, if this nation had as many dollars as we all produce in words every day, we’d all be rich. On the both the left and the right wing, they have quite a bit of advice to offer you every day, and if the center had wings, they’d all be flapping at you as well. And you’d do well to listen.

Finally, there are all the Joes who are continually stepping into the limelight to offer their wisdom. Joe the Plumber is actually a correspondent for somebody right now. Joe Sixpack may even sober up to give you his views. And then there’s John Q. Public. You’ve got to keep them in mind. Listen to them all!

And then, you know what? Do what YOU think is right, okay? Then maybe, just maybe, we’ll all may have a chance, I think.

In the huge Bank of America (BAC) fiasco/bailout/tailspin, there are a lot of people at whom it would be tempting to wave a wobbly finger. Ken Lewis is taking a lot of heat, and it’s not hard to see why. His decision to purchase Merrill Lynch back last fall is looking like the ultimate investment in a money pit. 

This morning it was revealed that during the last quarter of 2008, Merrill lost $15 billion. That’s a lot of money. I wonder what their security analysts would have to say about that. They’re still publishing their opinions about other companies, for some reason. Perhaps they would care to run some models and offer their views about their own?

Parenthetically, and apropos of very little, I do think it would be a good idea for executives in bad odor with the media, their shareholders, regulators and the public, to update their headshots when the first scent of smoke begins to waft through their hermetically sealed windows. The beamish one of Mr. Lewis, placed next to articles questioning his perspicacity, does him no favors.  Just a thought.

What does fascinate me, however, is the role of the consultants hired to investigate the wisdom of the deal from the shareholders’ perspective. As FORTUNE Senior Writer Colin Barr points out elsewhere on this site:

… CEO Ken Lewis’ decision to buy Merrill isn’t the only thing that looks questionable now. So does the advice he and the BofA board got on the hastily arranged Merrill deal from the bank’s advisers, Fox-Pitt Kelton and J.C. Flowers & Co.

The financial advisers offered opinions calling the deal fair to Bank of America shareholders… What’s more, the bank’s shareholders paid the advisers $20 million for the opinions – which the firms formulated after investigating Merrill Lynch’s condition over a single, hectic weekend.

$20 million bucks for… how many hours of work do you think that represented? Let’s be generous and say 1000, spread out over a lot of people. That means the firms were being paid $20,000 per hour for their work. That’s fine. Everybody has their price, and that was theirs. But don’t you think somebody should get a rebate? Do consultants ever give those? Perhaps not. Anway, why should they? They did what was required of them, after all, what is always required of such folks.

They told management what it wanted to hear.

I’ve been around the horn lately, surfing the tide of where my business takes me - Los Angeles to Las Vegas to LA again - and haven’t been back east for almost a month.  I’ve actually never been away from New York City for quite this long, not for years and years. When I planned this chunk of time, I didn’t think it would affect me all that much.

But after a while, I started to feel kind of weird… as if a central part of my persona was melting down… leaving an empty place that nothing rushed in to fill.

I had planned to stay in LA for another couple of days. But sometime on Monday, I realized I was unravelling. It hit me in the evening, when I was shopping for dinner at Trader Joe’s. The place was crowded enough; cars battled each other for available space in the parking lot with the same vicious spirit that inhabits your average casting call. In the store, people did that thing you do when you shop by yourself, each individual in their own bubble of concentration. Do I want this? Would I be happy eating that? Is that good for me? Or should I get a vegetable instead? I realized that perhaps 90% of the people in the store were shopping for one. That’s what show business is all about.

The week before, I was in Vegas. I think I may have mentioned that to you. I liked it. I won some money. I saw some gizmos. The weight of the loneliness in the casinos was palpable. Maybe it’s because business is down, I don’t know. But the dealers stood behind their felt barriers like cows in a field, waiting for action. Here and there, the odd slot machine disgorged change to a seemingly disinterested player, who took his winnings in stride and fed them back into its brightly dingdinging maw.  There was plenty of room in the sports book, too.

LA. Vegas. All about the space between people, cars, buildings.

So Tuesday morning, I booked the redeye back to New York for the following night. I’m pretty advanced in my march through life to take redeyes. It takes its toll. It’s harder to recover from one. So I guess something was really pushing me to get out of Dodge.  It wasn’t completely voluntary is what I’m trying to tell you. I had to go. I had to get back here, to the #1 place on this planet where everybody is in your face all the time.

So a couple of hours ago, I touched down on the 8:10 AM overnight flight from LA. It was snowing. The wind hit me like a hammer as I walked out of the enormous American Airlines terminal at Kennedy. Tiny particles of ice dug into my face. Right now I’m at my desk and the Weatherbug says it’s 16 degrees, and tomorrow it’s supposed to fall into the single digits. I’m going to go out in a few minutes and have lunch at the place where everybody knows my name, where a relatively small bunch of winners and losers hangs together for warmth in an environment that’s tough to take in more ways than one.

Lord it feels good to be back in that cold, hard place.

What is the greatest contribution of our civilization to the world? When we look back at what we’ve done as an empire, what will emerge as the truly unique thing we’ve left behind? I believe that when the sun sets on us, if it hasn’t already, our one great bequest to future generations will be the wonder that is American marketing. In it, we have developed the ability to make people desire products and services for which they have absolutely no need. With the right messaging, the proper delivery system with the correct frequency and reach, there is nothing we cannot make you want. And in the meeting of those desires, there is joy.

Selling is, of course, as old as humankind itself. But the mysterious wonder that is marketing as we know it really came into its own in 20th Century America.  Bodily functions that had been considered natural for millennia were suddenly shameful. Products were now required to eradicate odors, hair, imperfections in form and function. Time passed, and there was virtually no problem that could not be cured by the right thing at the right time.

Today, the pharmaceutical industry works hand in hand with our doctors to invent conditions that only their drugs can treat, often over an entire lifetime of use. The engine that drives these desires and meets them defines our economy.

This brings me to SkyMall. I see their catalog mostly when I fly. It is the entertainment of first and last resort for the entire airplane. As we take off, people are reading SkyMall. As we land, they are reading SkyMall. I believe this is so because takeoff and landing is the time of greatest stress for those who entrust their lives to this heavy machine that’s supposed to hang reliably at 35,000 feet. And it makes us feel good to see the amazing trove of crazy, idiotic stuff offered in the book, and find that we want it, and in that wanting we are suddenly at home, comfortable in a way we recognize as cozy, human and thoroughly American.  

This time, I found I wanted an amazing blender that can make three pitchers of various drinks when we’re entertaining, a dog bed that would be perfectly suited to our spaniel, and a Wonderbar towel warmer for our bathroom. 

Next time, I know it will be different. But I also know that I will be amazed, not so much by the profusion of choices contained therein, but by the fact that so many of these objects are completely superfluous to any credible existence, and I want them anyhow.  That’s the point, isn’t it? Anybody can make you drool over something you need.  Our culture has taken it to the next level.

And that’s why I still believe that in the end we’re all going to be all right. If people are buying meerkat gang sculpture for their yards and living rooms, can recovery be far behind?

The storm clouds have gathered. Hell, it’s raining. But that doesn’t mean we have to be stupid. So I’ve decided to avoid, deride and abjure the following group of bad actors that right now are circling in the mist: 

First, the Executioners. There are those, mostly from Wharton, for some reason, who believe that every problem in the business universe can be solved by firing people. While this does solve some problems immediately after we leave fat city, it begins to pale as a strategy well before those who are addicted to it decide to put down their quick fix. I’m going to keep a keen eye out for these types and see if I can leave them at the station after the rest of us have departed for better climes. 

Next, Revisionistas. These are the guys who are working real hard to avoid accepting the blame for what has happened, and are spending most of the time repositioning themselves and their cadre. We know who’s to blame. Everybody. But in the end? I’m going to regard these losers as I would a bunch of teenagers caught with a bag of weed. It’s usually the guy who protests his innocence the loudest who’s the dealer. 

Rear Admirals: Of course there are those who were very happy in the last iteration of our economy. They’ll be out in force trying to kill the new one. Did you know that Franklin D. Roosevelt was responsible for the Great Depression of the 1930s? Neither did I. But these guys do. Know why? Because if Roosevelt was a bad guy, the fellow who’s being compared to him right now must be too, right? Look, friends. If there’s one thing we know, it’s this: over the past decade or two, we’ve been spun. Let’s not get twirled by the same spin doctors again, now that for the most part the only spinning they should be doing is down the drain. 

Insecurity Analysts: Bozos to the left of us! Bozos to the right of us! And still we fight on. The job of an analyst is to look at a specific company and run models. Their models are fraudulent, stuck together with bad glue and yet they continue to analyze, because they are analysts, and that’s what they do. Inherent in their deal is that they look at each company they cover as if it existed in a bubble. Why? Because their job is to analyze  and so on and blah blah blah. If they won’t shut up, it doesn’t mean we have to listen. If I never hear another learned opinion from one of these guys it will be too soon. 

Economists: See above. 

Ostriches: They live all around us, their butts in the air, their heads in the sand. A lot of the time they’re in charge of budgets, but they can also be in any cornice of the corporation. And while doing business as usual is a good thing, a nice look around at the operating environment doesn’t hurt, either. Ostriches are scared, impatient and likely to run for the horizon at the slightest perturbation. They make me nervous. Nervous is bad. 

Weasels: In spite of all appearances, there are those who always believe, perhaps as a demented part of the American dream, that every horrible eventuality carries with it the seeds of tremendous opportunity. Perhaps it does, for Warren Buffet. For the rest of us, this not a time for greed and getting over on our fellow citizens. I partially blame business magazines, many of which now sport huge cover stories about how 2009 is going to be A GREAT YEAR FOR YOU! It’s not. My goal is to live through it. I’m not looking for a huge upside, and I’ve got a real gimlet eye for anybody offering me one. 

Rastas: Don’t worry. Be happy. Ridiculous, right? On the other hand… We’ve already got the dreads. 

I guess the 3D television in the LG booth was the best thing I saw. It was very, very cool. I forget what programming they had on it. It might have been 3D football. It’s not enough that the 1080P HD pigskin is as clear as a marble before your very eyes, now it has to come flying at you out of the screen. If the purpose of marketing is to sell you something you never knew you needed, then this place is a marketers dream. Around the corner at the LG booth, a group of penguins was frolicking across an iceberg on a screen that was less than a millimeter thick, I think. Is that possible? Less than a millimeter? I believe so. Like, .85 of a millimeter. That’s thin. And the penguins were amazingly clear and compelling. 

For some reason, by the way, most of the programming on these amazing LCDs and Plasmas and other gigundo display units seemed to center around fruit, insects and fish cavorting. Plums so juicy and compelling you felt like reaching out and picking one from the screen. Tiny clownfish darting amid the coral. And sports, of course. If I didn’t know better, I would come to the conclusion that those who slaver over this hardware were interested in nothing but fruit, fish and football. 

Panasonic (PC) featured a booth showing a 3D movie, which was huge, filling an entire screening room. Stuff was flying out at us all over the place — helicopter blades and aircraft wings and confetti and a lot of other objects small and large. I have to admit that I might not be a candidate for genuine 3D motion pictures. I felt like the experience was resonating in a part of my brain that had yet to be accessed by other human experience so far, and didn’t appreciate the intrusion. My head hurt afterwards. It was technologically impressive beyond belief, though. One day I suppose everything will be in 3D like this, and people will have surgically altered corneas to make the clunky gray/blue glasses unnecessary.

Microsoft’s (MSFT) booth was very impressive, with exploding demonstrations of its new Windows 7 platform, and the camera makers were there, too, showing off enormous ranks of digital toys with more megapixels than you can shake a memory stick at. I wanted one. Honestly, I think it’s kind of churlish of these guys. They show you all this cool stuff and they don’t give you one for free? I would have been happy to take a Canon 50D Mark II off their hands. 

I won’t make you guess which displays were the best attended. I will simply tell you that if you want to collect a group of men in one place and have them fight over the best seat, simply put out a gaming demo. Chairs that immerse you in a battle zone. Full body armor that responds as a second skin to protect you during an all-out space war. Steering wheels more sensitive than a stressed out CEO. The rest of the sector could go screaming down in flames, but games will rule forever. This is perhaps why the gaming convention, which is called E3, is now on the upswing, while this one is showing a little softness around the edges, like a fine cheese. 

There were also, as always, the inexplicable products and services that transcend the “Hey that’s awesome even though I have no idea why anybody would want or need one” category and enter the “what the frig is it?” dimension. Like, who needs a watch that is also a phone? I don’t. And how many iterations of a personal music or video player are we going to require? As far as I’m concerned, what this society needs at this point are more experiences that are social, that bring us together in large places to feel the same things, not new ways to go into our closets and pleasure ourselves on tiny screens. 

Speaking of which, I misinformed you. The porno convention starts Monday and is not running concurrently with this one this year. I suppose this makes it possible for the 100,000 people who are here, 90 percent of which appear to be somewhat needy men, to stay an extra couple of days to see if they can experience the ultimate social experience. I’m not sure what I think of this development, which is a change over prior years. Perhaps it explains why that number of attendees, as impressive as it is, is rumored to be down between 15 and 25% over prior installments of CES. 

I will say one thing. The mood here breaks down into two camps, like the rest of the country at this point. Group 1 says it’s over, the party has ended, CES will soon be no more, the sky has fallen, the good times are done, this is a permanent crimp in our shorts. Group 2 says wow, look at all this cool gear, all this great programming, this plethora of invention and desire and magnificent tropical fish dancing across screens the size of your living room, it’s a great world, our potential is limitless, we will be back. In the meantime, let’s gamble. 

I’m with Group 2. I’ve won more than $400 this week, incidentally, mostly at craps, and I intend to keep all of it. Which is why I’m taking off this morning for the left coast. I can’t wait to get home and fondle my cameras. Viva Las Vegas and all that, but this is more than a great place to be. It’s also a great place to get out of.

Vegas, January 8 – You wouldn’t believe the portions they serve you here. It’s almost like they sit planning the menu for people who are looking to keep their weight at a nice, round 300 pounds. Who wants a pizza with scalloped potatoes on it? It’s the house specialty where we had dinner last night. The drinks are small and expensive. A vast majority of the waiters look like potential chorus girls or Chippendales. The others appear to be eunuchs from the local sultan’s harem. 

The night before the convention was scheduled to start, the casinos looked pretty empty to me. At the Palazzo, there was one poker table working. No Hollywood, Bollywood or Silicon Valley royalty seemed to be in evidence. At my hotel, the slots were occupied only by the usual assortment of sad, droopy gray people, their cigarettes mostly ash hanging from the corners of their mouths, giving the enormous, ridiculously gaudy emporium the air of an extremely tricked-out Trailways bus terminal. There was plenty of traffic outside, though. So maybe today will be different and the town will explode with nerdish life. 

There are, of course, as is traditional for this week, two conventions in town – the Consumer Electronics Show, which is my focal point on this iteration of my journey through life – and the Adult Video gathering. The plane on the way from LA was thus filled to capacity with an extremely bifurcated group of individuals. There were the sometimes rumpled, sometimes crisp graduates of their high-school audio-visual club, with assorted peppering of sleek media and internet business executives, and then there were the tattooed, the augmented, the highly scented, spangled and perhaps too-juicy.

I was on an aisle seat sort of up front of the plane. My associate and traveling companion, who I’ll call Ted, was on the window. Between us, at the very last minute, plopped down a pneumatic six-foot tall, platinum blond young woman, dressed all in black, with glitter on her fingernails, which were not of organic material and were so long she had to employ special means to manipulate her touch-screen IPod.  She spoke a very plump, expressive Russian on her cell phone until we took off. Then she read Cosmo. Several articles appeared to be more interesting than the ones in my Economist, but she was flipping the pages too fast for me to really follow them very well. 

It’s not a coincidence that the porn industry meets at the same precise time as the wonks fly in for their annual tech fest. Somebody from the adult business obviously figured out some time ago that it would be wise to hold their extravaganza right now, when the town teemed with guys who spent the best years of their lives with their hands on their joysticks. 

My pal Weaver told me yesterday that “nobody goes to CES on Wednesday,” so maybe the scene will change today. Sources say that the meet is going to be somewhat smaller this year, with slightly less hotness. That wouldn’t surprise me. First of all, conventions like this one have a life span. A few years ago, you couldn’t get in the door at COMDEX. Now it’s gone. For years, I attended a gigantic raving bacchanal that was host to some of the greatest extreme depredation I have ever enjoyed in the world of business. At its height, it was in New Orleans. Man, was that fun. Then it moved here to Vegas. Time passed. The business changed. Now it’s pretty much a ghost town, with tumbleweeds rolling between the booths, which are mostly filled with guys from Sri Lanka handing out complimentary flash drives. Stuff still gets done there. But a party it’s not. 

And then there’s this little recession we’ve got going on. 

So I kind of wonder what it will be like to stand in the middle of the CES floor this morning and feel the vibe. Last time I was here it was like a cross between the bar in Star Wars and the Golden Calf scene in The Ten Commandments. I’ll keep you posted.

1. Remain cheerful.

2. In any event refrain from getting apoplectic more than 2.7 times per day. In public, anyhow. If, you know, possible. Unless it’s for a strategic reason.

3. Keep my job.

4. Lose no money in the stock market. If that means having nothing to do with the stock market, all the better.

5. Punch anybody who uses the word “derivative” without laughing, unless they’re talking about movies.

6. Employ no PowerPoint except in jest.

7. Have no drink “for the road.”

8. Continue to abjure MySpace and Facebook, recognizing that people who use them for business purposes are nerds. 

9. Wear comfortable shoes.

10. Ignore all predictions.

So I’m standing at the end of my driveway yesterday, early morning in my little corner of northern California, January 1, 2009.

I don’t know if you’ve ever been to this part of the world. It’s pretty nice. The air is crisp with the smell of pine and redwood, and a faint tang of wood smoke hangs in the mist that creeps with little cat’s feet up the street in the early daylight. An occasional jogger goes by, puffing. Downtown, people walk about, mostly with dogs, sipping on cups of ridiculously strong coffee. Bucolic is the word that comes to mind. Quite a few of the stores have shut down on the streets that feed the main square. The times are a’changing, and not for the better, here as everywhere. But people still say Good Morning here, as Papa John Phillips once noticed, and really mean it. 

Anyhow, there I am, standing in the first light of a new year, breathing in the fresh, clean smell of all that potentiality just hanging there, and in the distance, coming up the avenue, I see two of a certain kind of weird animal that exists around here. A couple of really skinny guys dressed from head to toe in festival spandex, streaking toward me on $3000 mountain bikes. I watch them approach. And as they whisk by I hear two things. First, the whoosh of air as they go past at blinding speed. And second, the voice of one spandexer to the other, raised to be heard over the sound of the wind.

“They’re offering six percent!” is what I hear, and then they are gone down the road. 

From this I take two things. First, that people who have been taught to do nothing but walk like ducks, talk like ducks, will always be ducks. And second, that these guys are the kind of morons whose mindset created this recession and will keep it on track for the better part of this year. Because you know what? 

Nobody legit is offering 6%.