Why T. Boone Pickens is right when he says this is a NATIONAL EMERGENCY OF NATIONAL SECURITY IMPORTANCE!
America stands at the edge of a chasm as deep or deeper than the one she faced in the 1930's. Our financial system is in tatters, the Fed is printing money in a desperate attempt to stop the rout in all of our major financial institutions, consumer demand for goods is dropping rapidly as Americans attempt to deal with Skyrocketing Energy prices. The U.S. dollar is depreciating as fast as the FED prints it and Imported Oil is priced in dollars so not only do we get socked with demand inflation but also currency deflation. We are already in a recession as bad as we have seen in decades and maybe more, and at least 12 other nations are seeing recessionary indicators as well.
LETS HOPE IT STANDS AS THE WORST RECESSION IN DECADES, for if things continue to deteriorate we might find our selves not facing severe inflationary pressures but actually deflationary pressures and an attendant depression not seen since the 1930's. Don't think so? Our current Fed chief's writings on what actions by the FED were wrong in the 30's are likely to be tested right now.
Just in case you are interested, it is actually very common for America to experience a depression at times like these!
What do I mean by times like these? well going back to the 1700's America has experienced a number of dominant ruling paradigms which manifested themselves in everyday life. Typically, as the dominant paradigm reaches it peak and begins to subside a newly emerging paradigm emerges to challenge the falling one. During this transition there can be a great deal of confusion and conflict between the falling paradigm unwilling to give up its power and the rising paradigm not yet strong enough to overcome the other.
According to Jack Lessinger, author of "Transformation", it is during this conflict period that America has typically entered periods of economic depression.
So guess what? Lessinger sees that today in America, the falling paradigm is the "Little Kings"--I want it all and I want it all right now on credit" is falling from its peak in the 1960/70's and the rising paradigm of the "Caring Conservers/Responsible Capitalists" has been rising rapidly with its focus on being much better stewards of the world we live in and willing to accept some loss of personal power in exchange for the highest good of all involved--i.e. a willingness to live lighter on the earth and pay higher taxes towards common goals like Energy Independence, clean air/water, healthcare/education. etc. here is an unsolicited link to Mr. Lessinger's book
No matter what we do folks, we are in for a huge battle here. We are not facing a blip on the screen here with the housing markets, stock markets and economy bouncing back, in fact we are likely facing a much further drop in the stock markets around the world.
One of the consequences will be that energy prices will likely fall back about 20% from their current highs as world demand and speculation (hot money) falls, the downside of this is that the pressure on us as individuals and our leaders will diminish for development of alternative energy for our Energy Independence. We will have to overcome this or we will once again be doomed to miss our opportunity to fix this like we did in the late 70's when falling gas prices diminished our drive for alternative energy sources.
DON'T READ THIS UNLESS YOU ARE BRAVE--Mr. Roubini called this reality out several years ago!
Warning… Not for the faint of heart… from Nouriel Roubini’s (NYU Stern) blog:
I was on Bloomberg TV this morning being interviewed about financial markets, the economy and the upcoming testimony by Bernanke.
As I put it in the interview: ``This is a systemic financial crisis, there is no end to it,'' Nouriel Roubini, professor of economics and international business at New York University, told Bloomberg Television. ``It's a vicious circle between a contracting economy and greater credit and financial losses feeding on the economy.''
Regular readers of this blog are familiar with my views. But here is a summary and significant extended update of my views that this will turn out to be the worst financial crisis since the Great Depression and the worst US recession in decades.
This is by far the worst financial crisis since the Great Depression
Hundreds of small banks with massive exposure to real estate (the average small bank has 67% of its assets in real estate) will go bust
Dozens of large regional/national banks (a' la IndyMac) are also bankrupt given their extreme exposure to real estate and will also go bust
Some major money center banks are also semi-insolvent and while they are deemed too big to fail their rescue with FDIC money will be extremely costly.
In a few years time there will be no major independent broker dealers as their business model (securitization, slice & dice and transfer of toxic credit risk and piling fees upon fees rather than earning income from holding credit risk) is bust and the risk of a bank-like run on their very short term liquid liabilities is a fundamental flaw in their structure (i.e. the four remaining U.S. big brokers dealers will either go bust or will have to be merged with traditional commercial banks). Firms that borrow liquid and short, highly leverage themselves and lend in longer term and illiquid ways (i.e. most of the shadow banking system) cannot survive without formal deposit insurance and formal permanent lender of last resort support from the central bank.
The FDIC that has already depleted 10% of its funds in the rescue of IndyMac alone will run out of funds and will have to be recapitalized by Congress as its insurance premia were woefully insufficient to cover the hole from the biggest banking crisis since the Great Depression
Fannie and Freddie are insolvent and the Treasury bailout plan (the mother of all moral hazard bailout) is socialism for the rich, the well connected and Wall Street; it is the continuation of a corrupt system where profits are privatized and losses are socialized. Instead of wiping out shareholders of the two GSEs, replacing corrupt and incompetent managers and forcing a haircut on the claims of the creditors/bondholders such a plan bails out shareholders, managers and creditors at a massive cost to U.S. taxpayers.
This financial crisis will imply credit losses of at least $1 trillion and more likely $2 trillion.
This is not just a subprime mortgage crisis; this is the crisis of an entire subprime financial system: losses are spreading from subprime to near prime and prime mortgages; to commercial real estate; to unsecured consumer credit (credit cards, student loans, auto loans); to leveraged loans that financed reckless debt-laden LBOs; to muni bonds that will go bust as hundred of municipalities will go bust; to industrial and commercial loans; to corporate bonds whose default rate will jump from close to 0% to over 10%; to CDSs where $62 trillion of nominal protection sits on top an outstanding stock of only $6 trillion of bonds and where counterparty risk - and the collapse of many counterparties - will lead to a systemic collapse of this market.
This will be the most severe U.S. recession in decades with the U.S. consumer being on the ropes and faltering big time as soon as the temporary effect of the tax rebates will fade out by mid-summer (July). This U.S. consumer is shopped out, saving less, debt burdened and being hammered by falling home prices, falling equity prices, falling jobs and incomes, rising inflation and rising oil and energy prices. This will be a long, ugly and nasty U-shaped recession lasting 12 to 18 months, not the mild 6 month V-shaped recession that the delusional consensus expects.
Equity prices in the US and abroad will go much deeper in bear territory. In a typical US recession equity prices fall by an average of 28% relative to the peak. But this is not a typical US recession; it is rather a severe one associated with a severe financial crisis. Thus, equity prices will fall by about 40% relative to their peak. So, we are only barely mid-way in the meltdown of stock markets.
The rest of the world will not decouple from the US recession and from the US financial meltdown; it will re-couple big time. Already 12 major economies are on the way to a recessionary hard landing; while the rest of the world will experience a severe growth slowdown only one step removed from a global recession. Given this sharp global economic slowdown oil, energy and commodity prices will fall 20 to 30% from their recent bubbly peaks.
The current U.S recession and sharp global economic slowdown is combining the worst of the oil shocks of the 1970s with the worst of the asset/credit bust shocks (and ensuing credit crunch and investment busts) of 1990-91 and 2001: like in 1973 and 1979 we are facing a stagflationary shock to oil, energy and other commodity prices that by itself may tip many oil importing countries into a sharp slowdown or an outright recession. Also, like 1990-91 and 2001 we are now facing another asset bubble and credit bubble gone bust big time: the housing and overall household credit boom of the last seven years has now gone bust in the same way as the 1980s housing bubble and 1990s tech bubble went bust in 1990 and in 2000 triggering recessions. And a similar housing/asset/credit bubble is going bust in other countries - U.K., Spain, Ireland, Italy, Portugal, etc. - leading to a risk of a hard landing in these economies.
But over time inflation will be the last problem that the Fed will have to face as a severe US recession and global slowdown will lead to a sharp reduction in inflationary pressures in the U.S.: slack in goods markets with demand falling below supply will reduce pricing power of firms; slack in labor markets with unemployment rising will reduce wage pressures and labor costs pressures; a fall in commodity prices of the order of 20-30% will further reduce inflationary pressure. The Fed will have to cut the Fed Funds rate much more - as severe downside risks to growth and to financial stability will dominate any short-term upward inflationary pressures. Leaving aside the risk of a collapse of the US dollar given this easier monetary policy the Fed Funds rate may end up being closer to 0% than 1% by the end of this financial disaster and severe recession cycle.
The Bretton Woods 2 regime of fixed exchange rates to the US dollar and/or heavily managed exchange will unravel - as the first Bretton Woods regimes did in the early 1970s - as US twin deficits, recession, financial crisis and rising commodity and goods inflation in emerging market economies will destroy the basis for it existence.
Thus, the scenario of 12 steps to a financial disaster that I outlined in my February 2008 paper is unfolding as predicted. If anything financial conditions are now much worse than they were at the previous peak of this financial crisis, i.e. in mid-march of 2008.
Know where your money sleeps folks. And get busy we are truly going to need the jobs and hope that our army's march for American Energy Independence is going to bring, we can do this together, know your role and be prepared.
jeffrey gordon
ps read Transformation
LETS HOPE IT STANDS AS THE WORST RECESSION IN DECADES, for if things continue to deteriorate we might find our selves not facing severe inflationary pressures but actually deflationary pressures and an attendant depression not seen since the 1930's. Don't think so? Our current Fed chief's writings on what actions by the FED were wrong in the 30's are likely to be tested right now.
Just in case you are interested, it is actually very common for America to experience a depression at times like these!
What do I mean by times like these? well going back to the 1700's America has experienced a number of dominant ruling paradigms which manifested themselves in everyday life. Typically, as the dominant paradigm reaches it peak and begins to subside a newly emerging paradigm emerges to challenge the falling one. During this transition there can be a great deal of confusion and conflict between the falling paradigm unwilling to give up its power and the rising paradigm not yet strong enough to overcome the other.
According to Jack Lessinger, author of "Transformation", it is during this conflict period that America has typically entered periods of economic depression.
So guess what? Lessinger sees that today in America, the falling paradigm is the "Little Kings"--I want it all and I want it all right now on credit" is falling from its peak in the 1960/70's and the rising paradigm of the "Caring Conservers/Responsible Capitalists" has been rising rapidly with its focus on being much better stewards of the world we live in and willing to accept some loss of personal power in exchange for the highest good of all involved--i.e. a willingness to live lighter on the earth and pay higher taxes towards common goals like Energy Independence, clean air/water, healthcare/education. etc. here is an unsolicited link to Mr. Lessinger's book
No matter what we do folks, we are in for a huge battle here. We are not facing a blip on the screen here with the housing markets, stock markets and economy bouncing back, in fact we are likely facing a much further drop in the stock markets around the world.
One of the consequences will be that energy prices will likely fall back about 20% from their current highs as world demand and speculation (hot money) falls, the downside of this is that the pressure on us as individuals and our leaders will diminish for development of alternative energy for our Energy Independence. We will have to overcome this or we will once again be doomed to miss our opportunity to fix this like we did in the late 70's when falling gas prices diminished our drive for alternative energy sources.
DON'T READ THIS UNLESS YOU ARE BRAVE--Mr. Roubini called this reality out several years ago!
Warning… Not for the faint of heart… from Nouriel Roubini’s (NYU Stern) blog:
I was on Bloomberg TV this morning being interviewed about financial markets, the economy and the upcoming testimony by Bernanke.
As I put it in the interview: ``This is a systemic financial crisis, there is no end to it,'' Nouriel Roubini, professor of economics and international business at New York University, told Bloomberg Television. ``It's a vicious circle between a contracting economy and greater credit and financial losses feeding on the economy.''
Regular readers of this blog are familiar with my views. But here is a summary and significant extended update of my views that this will turn out to be the worst financial crisis since the Great Depression and the worst US recession in decades.
This is by far the worst financial crisis since the Great Depression
Hundreds of small banks with massive exposure to real estate (the average small bank has 67% of its assets in real estate) will go bust
Dozens of large regional/national banks (a' la IndyMac) are also bankrupt given their extreme exposure to real estate and will also go bust
Some major money center banks are also semi-insolvent and while they are deemed too big to fail their rescue with FDIC money will be extremely costly.
In a few years time there will be no major independent broker dealers as their business model (securitization, slice & dice and transfer of toxic credit risk and piling fees upon fees rather than earning income from holding credit risk) is bust and the risk of a bank-like run on their very short term liquid liabilities is a fundamental flaw in their structure (i.e. the four remaining U.S. big brokers dealers will either go bust or will have to be merged with traditional commercial banks). Firms that borrow liquid and short, highly leverage themselves and lend in longer term and illiquid ways (i.e. most of the shadow banking system) cannot survive without formal deposit insurance and formal permanent lender of last resort support from the central bank.
The FDIC that has already depleted 10% of its funds in the rescue of IndyMac alone will run out of funds and will have to be recapitalized by Congress as its insurance premia were woefully insufficient to cover the hole from the biggest banking crisis since the Great Depression
Fannie and Freddie are insolvent and the Treasury bailout plan (the mother of all moral hazard bailout) is socialism for the rich, the well connected and Wall Street; it is the continuation of a corrupt system where profits are privatized and losses are socialized. Instead of wiping out shareholders of the two GSEs, replacing corrupt and incompetent managers and forcing a haircut on the claims of the creditors/bondholders such a plan bails out shareholders, managers and creditors at a massive cost to U.S. taxpayers.
This financial crisis will imply credit losses of at least $1 trillion and more likely $2 trillion.
This is not just a subprime mortgage crisis; this is the crisis of an entire subprime financial system: losses are spreading from subprime to near prime and prime mortgages; to commercial real estate; to unsecured consumer credit (credit cards, student loans, auto loans); to leveraged loans that financed reckless debt-laden LBOs; to muni bonds that will go bust as hundred of municipalities will go bust; to industrial and commercial loans; to corporate bonds whose default rate will jump from close to 0% to over 10%; to CDSs where $62 trillion of nominal protection sits on top an outstanding stock of only $6 trillion of bonds and where counterparty risk - and the collapse of many counterparties - will lead to a systemic collapse of this market.
This will be the most severe U.S. recession in decades with the U.S. consumer being on the ropes and faltering big time as soon as the temporary effect of the tax rebates will fade out by mid-summer (July). This U.S. consumer is shopped out, saving less, debt burdened and being hammered by falling home prices, falling equity prices, falling jobs and incomes, rising inflation and rising oil and energy prices. This will be a long, ugly and nasty U-shaped recession lasting 12 to 18 months, not the mild 6 month V-shaped recession that the delusional consensus expects.
Equity prices in the US and abroad will go much deeper in bear territory. In a typical US recession equity prices fall by an average of 28% relative to the peak. But this is not a typical US recession; it is rather a severe one associated with a severe financial crisis. Thus, equity prices will fall by about 40% relative to their peak. So, we are only barely mid-way in the meltdown of stock markets.
The rest of the world will not decouple from the US recession and from the US financial meltdown; it will re-couple big time. Already 12 major economies are on the way to a recessionary hard landing; while the rest of the world will experience a severe growth slowdown only one step removed from a global recession. Given this sharp global economic slowdown oil, energy and commodity prices will fall 20 to 30% from their recent bubbly peaks.
The current U.S recession and sharp global economic slowdown is combining the worst of the oil shocks of the 1970s with the worst of the asset/credit bust shocks (and ensuing credit crunch and investment busts) of 1990-91 and 2001: like in 1973 and 1979 we are facing a stagflationary shock to oil, energy and other commodity prices that by itself may tip many oil importing countries into a sharp slowdown or an outright recession. Also, like 1990-91 and 2001 we are now facing another asset bubble and credit bubble gone bust big time: the housing and overall household credit boom of the last seven years has now gone bust in the same way as the 1980s housing bubble and 1990s tech bubble went bust in 1990 and in 2000 triggering recessions. And a similar housing/asset/credit bubble is going bust in other countries - U.K., Spain, Ireland, Italy, Portugal, etc. - leading to a risk of a hard landing in these economies.
But over time inflation will be the last problem that the Fed will have to face as a severe US recession and global slowdown will lead to a sharp reduction in inflationary pressures in the U.S.: slack in goods markets with demand falling below supply will reduce pricing power of firms; slack in labor markets with unemployment rising will reduce wage pressures and labor costs pressures; a fall in commodity prices of the order of 20-30% will further reduce inflationary pressure. The Fed will have to cut the Fed Funds rate much more - as severe downside risks to growth and to financial stability will dominate any short-term upward inflationary pressures. Leaving aside the risk of a collapse of the US dollar given this easier monetary policy the Fed Funds rate may end up being closer to 0% than 1% by the end of this financial disaster and severe recession cycle.
The Bretton Woods 2 regime of fixed exchange rates to the US dollar and/or heavily managed exchange will unravel - as the first Bretton Woods regimes did in the early 1970s - as US twin deficits, recession, financial crisis and rising commodity and goods inflation in emerging market economies will destroy the basis for it existence.
Thus, the scenario of 12 steps to a financial disaster that I outlined in my February 2008 paper is unfolding as predicted. If anything financial conditions are now much worse than they were at the previous peak of this financial crisis, i.e. in mid-march of 2008.
Know where your money sleeps folks. And get busy we are truly going to need the jobs and hope that our army's march for American Energy Independence is going to bring, we can do this together, know your role and be prepared.
jeffrey gordon
ps read Transformation
Tags: depression, economy, energy, independence, jack, lessinger, nouriel, roubini, us
Comment
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Comment by Ben Ohai on July 18, 2008 at 5:31am - At least T.Boone has a plan, something Americans can rally behind. This country is drifting in a sea of uncertainty with no one willing to step up and do anything. During WWII we were able to develope sonar to stop enemy subs from singking our ships, we developed synthetic rubber for all types of vehicles as we were running out, we were able to create a device to break the German code, and we invented the atomic bomb. All in a very short perod of time,all under the idea that it was of a national emergency. We have a new national emergency, your telling me we can't solve this, give me a break our political leaders have zero guts and zero leadership. T.Boone is a throw back from those tough times in WWII he is our best hope. If your waiting on politicians to do anything forget it it won't happen. They don't care about the future of this country, just the short period of time in which they will be re elected. They just keep putting their finger in the dam as long as they get re elected.
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Comment by Alankar Gupta on July 17, 2008 at 9:56pm -
We need to solve our problems ourselves. We can not depend on others. We need to start with problem at a time. In my opinion the most serious problem facing the Nation is energy. Read anout it in the Pickens Plan. We are sending abroad 700 billion dollars every year. We can solve this problem. We have people likew Mr. Pickens who are ready to invest their money. But such people are few. They have billions but that is not enough. We have to get 320million US citizens involved. If each one chips in a few cents a day we can raise billions of dollar for investment in energy. We have to start a grass root movement, an energy revolution that no one can stop. Please look at the Petition on the link
http://www.ipetitions.com/petition/windenergycorporation
Please support it and please advertise it. I need your help to wake the masses and to get them involved.
Thanks.
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Comment by jeffrey gordon on July 17, 2008 at 1:28pm -
A little update on Franklin Raines former head of Fannie Mae, nice to see his insurance covered his losses, too bad the other 4,000+ Fannie Mae employees in D.C. find they have no such insurance to cover their 401K losses (many had much of their retirement savings in Fannie Mae stock--not a good idea, but it worked well for a while).
Raine's stock options are probably worthless anyway so most of his penalty probably left him with much of his reported $29,000,000 in compensation some claimed to be derived to "cook the books" to hit compensation target triggers.
Nice work if you can get it huh??
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Comment by jeffrey gordon on July 17, 2008 at 10:22am
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Hi Robert, yes many folks would probably find that deregulation typically results in profits being kept by the rich and powerful and their losses by "socialized" to everyone thanks to the influence the wealthy have over the public institutions of this country. Fannie and Freddie bailouts are a good example, by design they were allowed to be too large and carry the implicit guarantee (though not legal) that the Fed would not let them fail. Mr. Franklin Raines came out of his position as Clinton Budget Director (as i recall) and proceeded to allow Fannie Mae to decimate the proven underwriting guidelines which have been tested through several economic cycles and instead create the biggest mortgage banking mess in American history!
As a former accountant at a major firm I am constantly reminded how many costs are never included when we consider the consequences of actions that are initially promoted for their profitability only to find that the long term profitably is terrible--dumping mining wastes in the Coeur d' alene River comes to mind, cleanup costs of nuclear facilities does as well, clear air and clean water are prerequisites for humans to survive, i suspect in the coming years that the cost to preserve both as well as recover polluted water will run into a huge amount of money and thus make it clear that burning carbon deposits that are millions of year old and by their nature polluting is a stupid and non profitable idea.
jeffrey gordon
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Comment by Robert W. Foedisch on July 17, 2008 at 8:52am -
JefferyI
nteresting blog and some interesting comments. I think the current situation relating to fuel prices and the housing defaults is strictly a result of deregulation. One thing that if a fact is that we as a nation are never so prosporous as when there is regulation on banking, utilities, and manufacturing sectors of our economy. Personally I wouldn't mind paying four or five dollars a gallon for gasoline if it was a tax. What I object to is that the oil companies are making record profits by manipulating the supply. I hope mr. Pickens plans works.
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Comment by jeffrey gordon on July 17, 2008 at 8:31am
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I appreciate the feedback folks, don't me wrong, I too believe that in tough times like these Americans still can band together to do make the difficult and tough choices that are needed to move this great country forward. However, I think a lot of us have become a bit complacent and placed too much trust in many of our private and public institutions. My post was primarily to point out we are more likely at a major "tipping point" and that each of us should do what it takes to prepare for a difficult time as the markets bottom out--i.e. protect your capital--the personal wealth losses in the housing, stock and currency markets are at a century wide level--I would blame no one with fear about their economic future.
We have our governmental leaders responsible for regulating Fannie and Freddie, the banking industry in general, the FDIC, Mortgage insurance companies, Wall Street firms and hedge funds to thank for this debacle.
So what can we do? well make sure you know what your savings are invested in, stay liquid and don't try and catch the bottom of any of these markets, the other side of the bottom is unlikely to be fast rising so no need to be a hero here--Preservation of Capital is the Rule of the day. Instead, cut your overhead, and prepare to invest in clean technology and alternative energy when they emerge as the leaders in the next economic cycle in America.
If you read Lessinger's book, "Transformation" you like me, may realize the leadership to pull us through this mess is very likely to come from the next generation, lets hope those leaders are ready to go as we need leadership in the worst possible way right now!
jeffrey gordon
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Comment by Carl Stewart on July 17, 2008 at 5:58am - I wrote to my two state senators and pointed out that the rapid rise in oil and gas prices coupled with the housing crisis constitutes a threat to national security. I don't advocate a government takeover of private industries, because that would be jumping from the frying pan into the fire. I do advocate government downsizing, getting out of our lives, lowering taxes, etc. Of course, both of them replied with the usual meaningless rhetoric and political doublespeak. It's all inconsequential to them, and all they care about is their ca-rears [sic].
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Comment by Robert LoForese on July 17, 2008 at 4:50am -
Thanks Jeff for your comments, as an person who makes a living in the Automotive Industry I'm also concerned about America's short term memory loss if in fact the price of fuel levels off over an extended period of time. Thats why I'm really in favor of building up more and more discussion and membership on the Pickens Plan.. something that is enduring and grows independent of who's in the White House... because right now the ecomony and price of oil is the 3rd rail and no one (red or blue) wants to touch the issue, and again at least with the Pickens Plan there is some leadership being demonstrated.
Also ... don't forget members to call in Tuesday's 4:00 PM EST WTBQ radio NY 1110AM/99.1 FM 845.651.1110 - I host and produce Wall Street Automotive and plan to promote the Pickens Plan each week on the web. Also visit Read "the fool on the hill" recent post and other posts related to energy. Thanks. Keep it going and keep it professional always. Robb
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Comment by Ron A. Rhoades on July 17, 2008 at 4:17am -
Jeffrey,
There is a lot of fear in the investment community at present, at least for individual investors. A lot of this is due to media reporting of economic events which stresses the negatives far too much, and even communicates misinformation.
I have no predictions on the short-term future of the stock market. Academic research demonstrates that even when the U.S. stock market is slightly undervalued (relative to historic norms) there is no reliable method to predict what will happen in the following month, year, or even 5 years. However, over the longer term, such as 10 years or 15 years, when starting with an undervalued stock market there is a statistically significant likelihood that an investor's returns (using a buy and hold strategy) will be better.
I possess a fundamental faith in the long-term future of the U.S. economy, and the world economy. Unlike the Great Depression, the Federal Reserve, SEC, and Treasury Dept. possess more tools to safeguard our financial structure, and they are not unduly hesitant in using these tools when needed. I also believe that the global economy will continue to grow and expand.
Short-term investors in the U.S. stock market are likely to have one view about the stock market. However, if an individual is invested in the U.S. stock market for the long term, and is adequately diversified (i.e., owns a healthy percentage of high quality bonds, bond funds, or FDIC-insured CDs, for example), then my view is that the investor will be in good shape when all of this finally shakes out. Especially if the investor has the emotional fortitude to "buy low, sell high" using a disciplined approach to rebalancing the portfolio, and can stick with his or her investment plan for years to come.
This does not mean that America does not face challenges. The major challenges are trade deficits (in large part due to oil imports), federal government budget deficits, and a low personal savings rate. But that makes the PickensPlan all the more exciting - it provides a partial solution to one of the three biggest challenges facing the U.S.
Please note that I don't desire to be contacted by discussion forum readers with respect to my personal business activities, as my interest in the PickensPlan is to advance the plan itself. But I did desire to share my own views. I don't profess to have a "crystal ball" into the future of the stock market (and I don't believe anyone else has one either).
One thing is for certain - the PickensPlan is sorely needed. We must seek its implementation quickly. As the plan notes, there is a signficant opportunity with a new President and a new Congress to effect meaningful policy changes - especially in the next 100 days of the next administration. This requires that we build "Boone's Army" now, begin communications to our elected leaders (and candidates for office) at all levels now, and undertake additional action steps at the local, state, and national levels as they are identified by the many dedicated members who have joined this grassroots effort.
Jeffery, thanks for the post. It reflects the fears of a lot of individuals out there. In conclusion, my "two cents" is that things are not as bad as they seem, and that while things may indeed "get worse" I believe in the long-term strength of the U.S. and world economies. I believe in America and in Americans, and their continual capacity to innovate to solve problems. The PickensPlan is all about innovation - and addressing the largest problem any society might face - complacency. Thank you. Ron
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Comment by Garson on July 17, 2008 at 2:01am -
It is hard times, a time for Americans to band together. The decision makers have lead us down a path that serves themselves only and the special interest that has bought and sold them and our future. Our government no longer protects the people, only their own pay check and and the commercial interest which cuts the check.
All is not lost however, the people have the power of our purses. We can chose not to buy into what we are being sold. We can be more self determining. We can build backyard stills to make alcohol to burn in our vehicles, solar and wind can be used to generate electricity for personal needs on a grass root level taking most of our homes off the gridd or becoming producers. Hydrogen can be made from electrolysis in back yard systems. We have the technology to face the physical hurdles.
However, the moral issues of curruption of our government and its right to govern when it fails to protect us from special interest is another question.
We all must do our part, do what we can. I have been involved in the green building movement doing my part for some time. If we all get involved, for now we will all feel the pain and must work together, don't depend on your government to fix anything. It is time to plant a victory garden and grow home grown solutions.
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