Get Ready!!!!! AVALANCHE!!!!!!!!!!!!
You are going to start reading things you have never seen before. You are going to hear our leaders use words like HISTORIC or UNPRECEDENTED or UNEXPECTED. The first two may be true, but for leaders of this blog and others, it will be anything but unexpected. As cutbacks take place, services and the quality of the delivery of services will deminish dramatically.
The downward spiral really has just begun. It will get so bad that even those that have been long time bears will begin to become Bulls (it is much more exhausting and mentally draining to be a bear than a bull...cheerleading is fun).....but if my perspective is correct, they are still way too early. Let's hope I am wrong.
From Bill Fleckenstein:
"After considerable thought and deliberation I have decided to make a major change in my life: I am going to close my hedge fund. I have several reasons for no longer wishing to run a short-only fund as I have for the past 12 years. First, my original reason for starting the fund was because of developments I saw occurring in the late 1990s that I wanted no part of. I felt that Greenspan was fomenting an environment that would lead to disaster, as consultants, financial advisors, and the public at large were losing all respect for risk. Of course, the reckless behavior carried far higher and lasted much, much longer than I ever imagined it could. However, the recent carnage in the stock market, real estate market and the financial system (as well as the job losses) has washed away those excesses to a large degree and it has violently demonstrated the risks associated with investing....
Lastly, on a personal note, I no longer want to run a short-only hedge fund, as it is very stressful, nerve-wracking and generally not very much fun, entailing an intense focus on the short term to effect risk control. In addition, one views the world differently when operating solely from the short side and I would like to widen my focus as I did when I managed money from 1982-1995. My wife is especially happy about this potential change."
On a personal note....I really can relate to Mr. Fleckenstein.
Ken Heebner in WSJ:Fund Manager Turns Bullish on Financials
After making a fortune betting against financial stocks until last summer, mutual-fund manager Kenneth Heebner is turning bullish on the sector.
Mr. Heebner, who runs one of last year's best-performing mutual funds, is sure banks and insurers will recover next year, thanks to Treasury Department and Federal Reserve efforts to bolster lending.
Only time will tell if he is right. Meanwhile, that switch has harmed his performance lately.
His CGM Focus fund, which for years has posted a string of market-beating returns, this year is lagging behind the Standard & Poor's 500-stock index by 11 percentage points. For only the second time in his 11-year tenure, he is in the red, off 52%.
Here is some Governor talk:
Government will have to change "in a historic way," he said. As part of that, he said, "there's no question that there will be spending cuts in programs that have existed for a while."
Warning that Minnesotans are facing a time of "pain and sacrifice," officials Thursday said they would slash state spending and rethink the role of government in the aftermath of a towering deficit that tops $5.2 billion over the next two and a half years.
If you think Minnesota faces stesses, California can't even pay its vendors.......
California, the world’s eighth largest economy, may pay vendors with IOUs for only the second time since the Great Depression, State Finance Director Mike Genest said.
Governor Arnold Schwarzenegger warned that he may issue the warrants, which are a promise to pay with interest, to suppliers and contractors as the seizure in credit markets may make it too costly to borrow.
“It’s getting worse very quickly,” Schwarzenegger, a 61- year-old Republican, told reporters Dec. 1 after declaring a fiscal emergency and ordering the Legislature into a special session to find ways to close the deficit. “It’s like an avalanche in that it gains momentum. And that’s what we’re in right now, so it’s a real crisis.”
I only used a snowball analogy, but in true Hollywood fashion, the Governator uses an avalanche. Any thoughts on what is the difference between a real crisis and a fake crisis?
If you think its bad now, just wait until all those employees paying taxes this year won't be paying next year due to millions of job losses or pay reductions. Also, nor will all the businesses shutting down. Not only will millions of money losing corporations not be paying taxes, what about when they start asking for the NOL carrybacks. That will be billions and billions that the governments will be forced to REFUND to the corporations.....especially banks and builders.
The avalanche has just started. Stay calm. Stay cool and/or warm. Stay well stocked. My suggestion is something with a long shelf life........cigars and whisky sounds like a pretty good start.
The rhetoric is just leaving the starting gate. Can any of you pay your vendors, your grocery bills, or your state property taxes with IOU's????
It is simply amazing how many are simply staring at their feet hoping the avalanche is only Alstry's snowball.