“None are more hopelessly enslaved than those who falsely believe they are free”

Monday, May 31, 2010

Wall Street to Main Street: "Let me hold that"

Remember 2008? You know, when your 401k and other managed ‘investments’ took a huge dive? Not that long ago, I know, but you’ve probably forgotten, right? And if you’ve forgotten you probably didn’t use that as a learning opportunity to MANAGE YOUR OWN MONEY. Tisk, Tisk.

I know what you’re thinking: People are paid huge amounts of money to effectively manage your money. They study charts and trends and can track the patterns of the Dow with some efficacy; otherwise they wouldn’t have their job. Plus, you think you can forgive profit lapses, even pretty big ones when, overall, in the long term, you’re riding a wave of steady growth. The market, after all, has risen steadily over the years.
But consider this: 1) When you turn over your money to someone else to manage, it stops being your money, doesn't it?  You have a claim to it, of course, but while it's out of your hands, it stops being yours. 2) A reasonable person might argue, “Why can’t they see things like this coming?” After all, they study this! The fundamental problem is that the people that are "managing your money" are NOT on your side; they are not your advocate. If you lose your shirt, they still get paid. What they are doing is effectively gambling with your money to make themselves richer and if it happens to make you a couple of dollars in 20 years, everybody goes home happy; no harm no foul.

Do you know why they tell you to "buy and hold" or “invest for the long term”, or just do “dollar cost averaging” – investing the same amount regularly over a period of time? Because they can gamble (and profit) with your money!

Now, there are a fair share of people - astute invertors like George Soros, Warren Buffet, and Paul Ferrell that are forecasting a market crash of epic proportions. You can read Paul Ferrell’s assessment here.  There are others, from hedge fund managers to every talking head at investment firms from Charles Schwab and TD Waterhouse that want to hold your money and tell you that "now is an excellent time to invest"; that this bear market offers opportunity aplenty to buy. But hedge fund managers have clients that are multi-millionaires and the folks at the traditional investment firms are nothing more than brokers (like used car salesmen and real estate agents) who don’t gain unless you play and pay them to use your money so they can gamble! It’s a hustle of epic proportions yet, to really get ahead, we have to gamble; we must invest.  But get this: there’s really no way to get ahead, in spite of the conventional wisdom that’s continually spewed, by letting other people manage your money. That is simply a loser’s game. Hell, you’re not even really playing. To really get ahead, you must learn the rules of the game and become an active investor.

So, you've decided, you say. Now what do you do? If you believe George Soros and other preeminent investors of our time, now is a really, really volatile time to get into the game. A lot of people are predicting some really bad things, and I believe them.  In fact, a guy that I know who has a connection to one of Soros' employees told me not to buy anything - not even gold. His advice was to get tottally liquid.  Think about this: The author of a book called “Wealth, War, and Wisdom”, Barton Biggs – a Morgan Stanley prodigy and the manager of huge amounts of money – advises his clients to prepare for a “breakdown of the civilized infrastructure.” “Buy a farm”, he says. “Your safe haven must be self sufficient and capable of growing some kind of food… it should be well stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc. Think Swiss Family Robinson.” Mind you, Biggs is not advising Joe Plumber here – he’s talking to guys that have substantial loot! But you know what? I think now is as good a time as any for you and I to get in the game and start investing our own money. In fact, I think that now is the perfect time to do just that. The trick is to be smart and that's relatively easy when you can apply some common sense (remember the movie Trading Places?).  The way I figure it, someone is manipulating this whole thing - there's a mastermind employing sound logic behind the impending market collapse that Soros an many others are predicting. It's all a very well orchestrated hustle where only the people that understand it are really the only ones profiting from it. The others are stuck financing the calculated risks that they take, waiting to live to see 65 before attempting to live off the pittance of our 401k, overburdened, overtaxed, and too confounded by "market complexities" and everyday realities to snatch control of what's rightfully ours.

The reality is this: The Wall Street casino makes millions and millions of dollars for guys on the right side of the hustle, there’s no question. Geithner, Paulson and other Washington cronies make sure of it. Ever wonder why millionaires take colossal pay cuts to take government positions?
Yes, Wall Street makes mega-millions for insiders like the Goldman conspirators yet the casino is still below the 2000 record of 11,722. That means that after accounting for inflation, Wall Street actually lost over 20% of Main Street’s 401k retirement monies between 2000 and 2010. Don’t believe it? Check your statements! Their “advice” is self-serving. Period.  That means that many, many people WILL LOSE their shirts (figuratively) and their homes and retirement savings (literally) when the market implodes but people on the right side of the hustle - those that know where to put their monies (and it's not under the matress or under the ground) - always stand to gain.

Opportunities do in fact exist in Wall Street’s casino right now, but its NOT the crap they want to peddle - the bio stocks, alternative energy, tech stocks or name your niche-du-jour. Given their abhorrent track record only an idiot would continue forking over dollars to make other people rich while simultaneously sealing their own demise. Listen to me carefully, Ogres. Get as liquid as you can while leveraging some funds for NATURAL RESOURCE assets; gold, naturally, is the big one.

Don’t believe me? Jeremy Grantham – look him up – recently said price the market is overvalued by at least 40 percent. Another Wall Street insider, Richard Russell, also warns of an imminent crash: "Sell...by the end of the year we won't recognize the country". That's some heady stuff! See, people that study this really do see it coming - it's not just doomsday prognosticators like Gerald Celente - and this time these Wall Street guys see something on the horizon of such epic proportions, they can't keep quiet about it. Yet, is this something you're likely to hear on network TV? You might actually, but it will invariably go something like this: "Markets are inherently unstable and always self-correcting"... "The market will soon level out after this period of heavy volatility", or "The fundamentals of our economy are sound" (have you heard that one before?).
Know this: What we are facing is known as a "Super Bubble"; that's what George Soros calls it. When the market takes its next dive, as many predict, it will not simply be a market correction. It won't be described as a "bear". It will be a financial meltdown; a bust much worse than the dot com crash of 2000 and the 08 meltdown combined. The unprepared, which is to say the vast majority, will lose their life savings. Many will continue to lose their jobs and homes. Governments, both state and local, will fold and as economies crumble the infrastructure will collide. Crime will be rampant and panic will ensue. Finally, this Cosa Nostra will start anew.... but only after a very long, and deepening economic depression that’ll leave America and the rest of the world irrevocably changed.
Get ready. Now.  And please listen carefully: don't count on your governments help. Obama and his Bosses are in place to perpetuate the problem. Nouriel Roubini and Stephen Mihm tell Newsweek that "the president's half measures won't fix our failed financial system" because of a refusal to "bust up the too-big-to-fail". Does that sound like capitalism to you? More like Socialism (for the rich). Sure, Congress will continue to pass bills and present more legislation but unfortunately, the interests of the rich and well connected will continue to win out. Look no further than Christopher Dodd for proof. Here's a guy working overtime with Wall Street lobbyists to actually weaken financial reform. The lobbying interests of the rich are dumping big dollars to make sure the game doesn't change and greed can continue to go unchecked. Our government has failed us. Our governments most central and fundamental role - to protect the rights of its citizens by instilling measures to ensure the free and unencumbered pursuit of enterprise – has morphed into the protectorate of the super wealthy. Measures are systematically taken, regardless of whether Democrats or Republicans are in charge, to ensure corporate interests are insulated. Indeed, the economic interests of the super wealthy are protected while economic freedom for ordinary citizens is abrogated. Still, all the TARP bailouts, Federal loans, and "stimulus" tax payer debt by any other name simply will not work. You cannot continue to crank up the printing press and churn out monopoly money. This game will soon end. Wall Street knows it; and you’d better accept it too, soon.

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