Thursday, August 04, 2011


I just got an email from my broker entitled "Perspective on the market decline".

My response to him;

Ben, here's my Perspective on the market decline.

I'm happy to have the cash.




By the way.. everyone should have seen this coming after the tea baggers won the '10 elections and gained the house. Obama is now to the right of George Bush on economic issues, and by slashing federal spending as much as possible and doing nothing about jobs, we can be confident this isn't going to change any time soon. In fact, I fully expect Obama to lose re-election and things to get worse. Much worse. It's as if they don't even realize the US 10 year bond rate is 2.5%. I wish I could borrow money at that rate.

"Fear is fueling the decline" is a load of b.s. That's like saying the DOW is a high school kid despondent over unrequited love. The decline is fueled by everyone understanding the consequences of austerity measures, as demonstrated by the failure of those policies in Europe. Ireland is a hell of a leading indicator. The bond rate isn't "fear". The unemployment rate is real.

And it wasn't just that I knew that a "double dip" was coming that I cashed out all my investments, not just the ones I had with you. It was because investing even in something that supposed to be relatively stable and conservative, like mutual funds, has now become a roll of the dice. I'd estimate that investor's long term chances of losing money is 50/50 and that's a dumb gamble.

I'm fortunate I basically broke even after 3 years with those mutuals. I'm not going to play any more games with the most volatile economic situation of our lifetimes until the politicians can demonstrate that they can act like adults, and not play stupid games with things like the full faith and credit of the United States.

Anyway.. I feel for you.. if you had been doing this job back in the 90s when the world seemed relatively sane, people would feel confident and happy to put money to work for their retirements and you wouldn't get messages like this one from me, which must seem a bit unhinged. Until this chaos settles, which may take a very long time, I'm just not going to risk setting my money on fire.

But hey.. if the market super-tanks, I might just call you if it looks like a bottom. One never knows.

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