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From: brad herschel on 25 May 2010 18:47
On May 25, 12:01 pm, Nickname unavailable <Vide...(a)tcq.net> wrote:
> tsk tsk, poor alexy/jane:Wall Street lost over 20% of Main Street's
> 401(k)money between 2000 and 2010. Yes, Wall Street's a big loser the
> past decade:Given their miserable track record, only a fool would bet
> with Wall Street
>
> http://finance.yahoo.com/banking-budgeting/article/109632/warning-cra...
>
> Warning: Crash dead ahead. Sell. Get liquid. Now.
> by Paul Elliott, Motley Fool Hidden Gems
> Tuesday, May 25, 2010
> provided by
>
> Commentary: 'Game's in the refrigerator.' Power's turning off. Dow
> sinking below 6,470
> "This game's in the refrigerator! The door's closed, the lights are
> out, the eggs are cooling, the butter's getting hard and the Jell-O is
> jiggling ..."
> That was legendary Lakers' radio announcer Chick Hearn's signature way
> of calling a game early, telling fans the home team won ... you can
> head for the exits before the final buzzer. Chick wrote the book with
> popular sports phrases like "slam dunk," "air ball," "charity stripe,"
> and a "bunny hop in the pea patch" for a traveling violation.
> Chick's our inspiration today: Last March I wrote "6 reasons I'm
> calling a bottom and a new bull." Today it's time for a new call.
> We've had a good year. Net gains over 50% in 2009. But now: "Game
> over, head for the exits." Bears beating bulls.
> No, no, "it's a buying opportunity," says another legend, hedge fund
> manager, Barton Biggs. Buying opportunity? For who? Remember, Biggs
> isn't advising Joe Lunchbox about what to do with his little 401(k).
> Biggs' customers are mega-millionaires in his $1.5 billion Traxis
> Partners Fund. Main Street investors like Joe are prey in his casino.
> Read on, you decide: As you stare from high up in the nose-bleed
> bleachers watching the game, staring at a Dow that not long ago was
> above 11,000 and heading for 12,000. Now the Dow's sitting on the
> bench, ready for the showers, weak after a couple air balls around
> 10,000. No more timeouts. "This game's in the refrigerator."
> How bad is your bookie's point spread in this game? A blowout? Will
> the Dow drop below 9,000 again? Now that it's broken technical
> supports, will it drop below 6,470, where the last bull rally started
> in early 2009? Can you handle the nerve-racking volatility generated
> by Wall Street's high-frequency traders playing the game at warp-speed
> with algorithms making thousands of micro-bets in milliseconds,
> betting billions daily?
> So who should you listen to? Barton and I arrived at Morgan Stanley
> about the same time. He stayed decades longer, became one of the
> world's leading strategists, advising the kind of high-rollers who
> also bet at private tables in a Vegas casino.
> You remember Biggs: In his book "Wealth, War & Wisdom" he advises his
> high rollers to prepare for a "breakdown of the civilized
> infrastructure." Buy a farm: "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." Biggs is not advising small investors on
> what to do with their 401(k)s.
> If you're gambling at Wall Street's casino, folks, the odds-makers are
> betting against Biggs. It's "game over."
> Main Street lost 20% last decade ... yet like sheep keep going back
> Yes, if you're channeling Chick, here's your "mixed metaphor" cue
> card: "This game's in the refrigerator ... Wall Street won (proof,
> Goldman's $100-million-profit trading days and Blankfein's $68 million
> bonus) ... Main Street's headed for another losing streak ...
> Congress' lights are out ... the refrigerator door's closing on
> financial reforms ... the lobbyists are laying some rotten eggs,
> poisoning capitalism ... the Tea Party-of-No-No ideologies are
> hardening ... the bull's Jell-O is jiggling to a flat line ... and
> this market's going into hibernation, with the bears ... run, don't
> walk, to the exits, folks."
> But will Main Street exit? Will we ever learn? No. The Wall Street
> casino makes mega-billions for insiders like Blankfein and the Goldman
> Conspiracy. Yet "The Casino" is still below the 2000 record of 11,722.
> So after accounting for inflation, Wall Street lost over 20% of Main
> Street's 401(k) retirement money between 2000 and 2010. Yes, Wall
> Street's a big loser the past decade. Their advice is self-serving.
> Period.
> Given their miserable track record, only a fool would bet with Wall
> Street. Betting odds are Wall Street will lose another 20% in the next
> decade from 2010-2020. Yes, today's market is a "buying opportunity,"
> but only for Wall Street casino insiders like Biggs, Blankfein and
> even low-level staffers inside "The Casino." But not for our 95
> million Main Street investors, there's more pain ahead, this market's
> dropping.
> Correction? New crash imminent, worse than 2008
> More proof: Earlier economist Gary Shilling said price-to-earnings
> ratios are at a "nosebleed 22.5 level." The Dow was around 11,000.
> Money manager Jeremy Grantham recently said the market's overvalued
> 40%. That could mean a collapse to 6,600. Last week in Reuters'
> "Markets Could Be Derailed Again," George Soros echoed a "game over"
> warning with a "stark warning ... that the financial world is on the
> wrong track and that we may be hurtling towards an even bigger boom
> and bust than in the credit crisis."
> Now Dow Theory's Richard Russell is warning the public of an imminent
> crash: "Sell ... get liquid ... by the end of this year they won't
> recognize the country."
>
> A bigger meltdown than the credit crisis? Yes, Bush's team drove
> America into a ditch. But now Obama and his money men, Summers,
> Geithner, Bernanke, are digging the hole deeper. Soros says we have
> not learned "the lessons that markets are inherently unstable." As a
> result, "the success in bailing out the system on the previous
> occasion led to a super-bubble." Now "we are facing a yet larger
> bubble." Worse than 2008?
> Yes, the game may be "in the refrigerator," the lights will go out,
> but as Soros hints, the electricity may get turned off too. Get it?
> This may not be a correction. Not even a bear. What's coming could be
> worse than the 2000 dot-com crash and the 2008 meltdown combined, a
> "Super-Bubble" says Soros. And the biggest reason, Nouriel Roubini and
> Stephen Mihm tell Newsweek, is that "the president's half-measures
> won't fix our failed financial system" because he refuses to "bust up
> the too-big-to-fail banks."
> Yes, Congress will pass something. But unfortunately, as reported on
> MSNBC, Senator Dodd, the reform bill's sponsor, is a turncoat, working
> overtime with Wall Street lobbyists "to weaken financial reform,"
> leave us vulnerable to a new, bigger crash in the near future. And
> Wall Street lobbyists are spending hundreds of millions to kill
> reform.
> 'White Swans:' 2000 and 2008 crashes were predictable, next one too
> Recently Roubini was interviewed by Charlie Rose in BusinessWeek. His
> message confirms the worst. Roubini was questioned about his new book,
> "Crisis Economics." Rose began by asking, "what have we learned from
> these crises of capitalism?" Roubini could easily have said, "nothing,
> we learned nothing." His actual reply:
> "The first lesson is that crises are not 'black swan' events ...
> they're not just random outcomes. They are the result of a buildup of
> financial and policy vulnerability and mistakes -- excessive risk-
> taking, leverage, debt, and so on." They are 'White Swans' "because
> these events are predictable. But generation after generation, we seem
> to forget the past. When there's a bubble, there's euphoria. There's
> irrational exuberance. Consumers can use their homes like ATM
> machines. Governments and policy makers are happy because they get
> reelected. Wall Street makes billions of dollars of profits.
> Everybody's delusional."
> Sound familiar? Yes indeed, in "This Time Is Different: Eight
> Centuries of Financial Folly," economists Carmen Reinhart and Kenneth
> Rogoff pinpoint the key signal that will blow the whistle and call the
> game: The "90% ratio of government debt to GDP is a tipping point in
> economic growth." For 800 years "you increase it over and beyond a
> high threshold, and boom!"
> Warning, fans, the numbers on the game-clock are flashing wildly.
> America's ratio is now 92%, thanks to Obama's $1.7 trillion budget,
> future deficits, exploding debt. Soon, Ka-Booom! Another great nation
> bites the dust. Depression follows. Goodbye retirement.
> Warning: 800 years of history are calling 'game over'
> But can't we change destiny? Or are Dodd, Congress, Obama, Wall
> Street, the Party of No-No and 300 million Americans all just playing
> their parts in a historical script well-known to historians like
> Reinhart and Rogoff, Kevin Phillips, Niall Ferguson and others? The
> message of "This Time Is Different" is very simple:
> "We have been here before. No matter how different the latest
> financial frenzy or crisis always appears, there are usually
> remarkable similarities from past experience from other countries and
> from history. ... no country, irrespective of its global importance,
> appears to be immune to it. The fading memories of borrowers and
> lenders, policy makers and academics, and the public at large do not
> seem to improve over time, so the policy lessons on how to 'avoid' the
> next blow-up are at best limited."
> So please listen closely: All the TARP bailouts, stimulus debt and Fed
> loans won't work. Neither will a new conservative government. This is
> not a basketball game. We are not channeling Chick Hearn, calling this
> game before the final buzzer. While we prefer the illusion that "this
> time really is different," eight centuries of history suggest
> otherwise:
> "The lesson of history, then, is that even as institutions and policy
> makers improve there will always be a temptation to stretch the
> limits. ... If there is one common theme to the vast range of
> crises ... it is that excessive debt accumulation, whether it be by
> the ...
>
> read more »

FYI

brad

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