The chief business of the American people is business.
Yes, we all know that. I saw a snippet of the excellent program that Robert Wuhl has done for HBO, called Assume the Position, and he went over the whole thing about Calvin Coolidge (who said the above) and his three month stay in South Dakota. I have actually seen the hotel where he spent his time--they had a plaque that detailed his stay at what may or may not have actually been the same hotel. Sorry, Black Hills. I haven't been back since the early 1980s. Are you still an oasis of interesting in a sea of flat plains? All I remember was being able to backpack and drink out of the streams on your hiking trails out there. Yes, I can tell my kids--I once drank out of an actual stream.
Our economy should receive more attention. Best economy of our lifetime? Worst economy? Why don't people pay more attention?
Here's an excellent little piece by a man named Dan Dorfman:
After what Los Angeles money manager Arnold Silver called "a brutal three days," the question is: What now for the market?
A Wall Street superstar this year who runs Balestra Capital Partners, Jim Melcher, says he's "worried about a recession. Not a normal one, but a very bad one. The worst since the 1930s. I expect we'll see clear signs of it in six months with a dramatic slowdown in the gross domestic product."
Mr. Melcher, a market bear, had some pretty discouraging words. "What I think is not good for the country, but good for me." he says. His basic advice to the country's roughly 80 million stock players: Run for the hills — the worst is far from over. An investor's stock portfolio now, he believes, should be only about half of what it might normally be.
With the housing market in a state of collapse — and he says he believes it is far from over — Mr. Melcher argues that average homeowners will not be able to withstand the kind of recession he sees, given the added burdens of rising energy and food costs, and continued deterioration in the credit markets.
Noting that consumption is already slowing, Mr. Melcher figures sharply rising unemployment is inevitable. Another of his worries is that central banks around the globe, America's included, are debasing their currencies, which is setting the stage for a new round of higher inflation. Our bear figures the next six to 12 months will be awful for investors as the market goes down "pretty substantially." His frightening outlook calls for an additional 20% to 30% decline from current levels. A drop of that magnitude would put the Dow down in a range of roughly 9,100 to 10,400.
Let's not kid ourselves--there's no question that Pollyanna could find a pony in a pile of horse manure and find something about our economy to praise. Does anyone get that sense of deja vu all over again for 1987? The other day I saw a story about the homeless, and how 1 out of every 4 is a Veteran. Next thing you know, some Evangelical Christian is going to get caught up in a massive scandal involving sex, fraud, money and wine. Oh, never mind.
Is anybody heeding the call? Are the fatcats quietly diversifying themselves while everything gets ready to collapse?
Today is a good day to look at the investments and the strategies my family has in place, and that's what I'm going to do. Not that there's been any neglect, but hey--who sits around thinking about these things on a regular basis? I encourage everyone to do whatever they need to do to make sure that if things go in the tank, they have a plan to rescue their resources and come out looking good. I've got a date with T. Rowe Price, and I'm not bringing flowers.