Sunday, November 25, 2012

Creative Enforcement

This December marks the fifth anniversary of the beginning of the Great Recession, and most of the American public (including me) are still angry about why it happened.

Now, I'm not angry for selfish reasons. Except for the taxpayer-funded bailouts and the continued risk of economic collapse, the Great Recession didn't negatively-affect me financially. I profited from it.

In 2006, I saw what was coming, prepared myself accordingly and profited tremendously from the vast financial crimes that were perpetrated against the American public. Although I tried to warn everyone, I'm not angry simply because I personally lost everything like many others.

I'm angry about how it's affected American society as a whole.

What I'm still angry about is the fact that leaders in Wall Street, the banking industry, the real estate industry, and in collusion with some leaders in our own Government, successfully perpetrated the largest financial crime in American history - and got off Scot-free!

But, what makes me even more angry is that even after five long years, many of the same people are still running the show in Government, and that nothing has really been done to prevent these crimes from being perpetrated again. Enforcement is a joke.

So, with all that's transpired in the past five years, how can any rational person NOT be angry and to be cynical about the future of America? Who would trust such a corrupted system?

Personally, I don't see anything changing for the better until the corrupted are removed from office, the too-big-to-fail risks are addressed, the rules are fixed so they can't be "legally" exploited, and the top perpetrators of these crimes are held criminally-responsible. IMO, that's the only way to restore faith.

Like George Carlin cynically jokes about, perhaps we need to become creative in our enforcement.

Friday, November 16, 2012

Weekly Wrap | It's Going Down

Although there was a pop on Friday afternoon due to news reports about the fiscal cliff possibly being avoided, the S&P 500 fell 20 points from last week, down another 1.4%, to end the week at 1360.

But something else piqued my interest this week. Sometimes you have to look for subtle clues in order to get a sense of market sentiment, and I think I discovered something.

As the stock markets tanked this week, I got a quiet sense of desperate fear being reported through financial mainstream media in the form of "more than usual" bullish and optimistic posts, especially later in the week, in order to stem the flee. The crowning clue was when CBS This Morning stopped airing their usual stock market updates across the bottom of the television screen.

It's like the word is being put out behind the scenes to spin the news in order to get people to focus on anything else but a falling market. Do anything to allay fears and keep investors playing the game. It's not like I can't understand their reasons to do anything to prevent another market meltdown, but I can't see how they're going to succeed. Investors will eventually see through their schemes.

The global slowdown has corporate profits falling, and that doesn't bode well for either stocks or for unemployment levels. And it's not like there's anything on the horizon domestically to cheer about economically, although some people are trying to be cheery. Even The Vanguard Group is putting a positive spin on flat or worsening economic data.

The only bright side anywhere economically is perhaps the housing market, but personally, I see that sector's short term growth leveling out or producing very slow growth at best.

Although the focus in the news has been the fiscal cliff, it isn't the only thing that investors should be worried about. The world has descended into even further chaos since my last post discussing our current problems. Recessions, riots, and violent demonstrations against austerity and corruption are increasing throughout Europe and South America, and we're on the verge of war in the Middle East.

So, you can buy into the spin and be the Huckleberry left holding the bag. But for me, I'm still going to remain in cash, and I'm still expecting even more stock market declines. It's going down.

Thursday, November 15, 2012

Friday, November 9, 2012

Weekly Wrap | King Of The Jungle

Looks like I was right on the mark when I commented that investors were waiting for the results of the Presidential election before making a commitment with their investments. And that commitment was to SELL, loudly. The S&P ended this week down another 2.4%, finishing at 1380.

And I still don't see a good reason for it to change it's course. So, I'm remaining fully invested in cash.

Now, I know what you're thinking. What makes me so certain about my own investments?

How can I, a mere human without fangs or claws, gain an advantage in a market environment full of ferocious predators trying to eat me alive? How can a simple individual investor consistently outwit a pride of lions, to become king of the jungle?

Like I said before, it's about being one with the markets, and staying attuned to what's happening in the jungle around you, understanding the motivations and behaviors of both your predators and their prey, and confidently making the call before the herd stampedes.

That of course, and lots of alcohol.