kootchman
Oh, we got some hints there DPB… the first one was… the tech bubble … I pulled out of mutual funds and stayed out. Everyone indeed! The worst offenders? Take a look at the condition of public employee pensions. Was it sweet or what? CalPers, et al… denied unions nothing… they could give annualized raises of 5-7%… promise defined benefits plans, … except … they can’t. They didn’t have to tell the truth… and they didn’t have the assets to cover the promises.. Politicians loved it. We stopped investing. We started to speculate… holding stocks, not even caring if PE ratios were 40:1…. we felt rich.. we spent rich.. and when the housing bubble burst.. the average US citizen had a negative value, less than 2 months of reserves on hand, owed more on credit cards than they had in savings, borrowed against “equity” they didn’t really have, and then…. the federal government was like the barker trying to get you into a t—y bar…..people were taking out equity loans to buy stocks!!! If it goes up… it can come down…. there were hundreds of financial brokers out there saying loud and clear ”’ “tulip bulbs”….. now all that speculative wealth has vaporized cause it never was…. stocks are speculation, dividends are investments. You do the former with excess capital and a hight risk tolerance. Not with the kiddies college funds and your home as collateral. Dumbasses… and y’know… they blame the carnival owner…. what were you thinking when you walked into the tent? we learn this lesson every 75 year or so… with great regularity. It is stunning the assets you can get today with cash or good credit score… watcha want? Repo boats? Houses, Planes, Cars, … at maybe 20 cents on the dollar? .. some will benefit greatly from this downturn. The sooner we come to terms with it… clean it out, .. the faster it goes away. It’s like infrastructure… the clamor for it.. dude construction is so capital intense… it hardly makes a blip.. we aren’t going to put hundreds of thousands of construction workers back on the job… not unless you ban all the heavy equipment, hand out shovels and wheel barrows, drop wages to $10 per hour… and do it like the old CCC …. low cost, labor intense projects… not high cost capital intense… thats where the 1% will rake off the cream. Like or not.. the “equity of the middle class was shaved 40%…. ” the asset base they held is worth what is was 25 years ago. You can’t tax your way into prosperity with that base to support you. You cannot support 2012 government wages and benefits with an asset base that is worth what is was in 1978. It ain’t there.