Quantum Of Solace

A Naybob of Transport writes in...(names changed to protect the innocent)

Hi Nattering One,

Well you nailed it 6 months ago. I have to give you credit. Should have listened closer to you back then.

Ugly times indeed. I like so many others got greedy and I am paying the price for it now.

Thanks,

The Captain


The Nattering One responds...

Dear Captain,

Sorry to hear about your losses, acting like a ostrich (head buried in the sand) is a tough thing to fess up but at least unlike the whining bankers and brown shoed Wall Street snakes, you have the balls to admit it and take ownership for the damage.

Trust me, I've had my moments too, not buying Microsoft in 1983, or Cisco in 1993, or flipping as many houses as I could the last 5 years, all because I truly underestimated the greed and stupidity of the American public.

The latter activity in all good conscience I could not engage in, as I do not believe in profiting from speculation on a necessity of life. Food, or what one is sustained on, a roof over ones head and the energy to heat it, should all be off limits from marketers, serial flippers, speculators and margin seekers. Doesn't sound capitalistic, does it?

If these items had been taboo to speculators, we would not be in this morass. The ensuing bailouts have nationally socialized the housing market and insurance.

Homes are sticks and bricks where people live their lives and raise families. If you lived in the home for an extended period and it appreciates, thats one thing. Homes should not be chattle for serial flippers or landlords.

Seek margin in video games or cars or stereos or durable manufacturing, not financial instruments tied to the necessities of life. When you turn your own backyard into a major source of wealth, thats when the trouble starts.

In the last three months, two of my "well to do" friends have run into a sudden "cash flow" problem and have asked me me for a personal loan. One who offered 20% on the hard money, has everything in UBS, and I warned him 6 months ago to move to another broker, he still hasn't.

I can already hear him.... why can't I get at any of my money?

The other friend offered 10%. Rather than loan sharking and risking their long term friendship in the event of non payment as both had the means and found other ways, I graciously declined the short term profits.

Another friend who didn't ask for a loan, and will never need to was recently down several million but has bounced back a bit due to most of his eggs being in PnG, which to date has gone up in a flight to safety. Tampons and toothpaste...

Going against my advisory, this same guy lost $5 million in the dot com crash. He got it all back in the ensuing reflation or secondary echo bubble, but due to tax issues, never diversified and spread the risk.

Bottom line, ostrichs are creatures of habit which never learn, and their level of denial and apathy is incredible. Sound vaguely familiar to another species?

And as for all those who believe in letting a "professional" handle it... Just because someone has a drivers license doesn't mean they know how to drive. Just because someone has a law degree, doesn't mean they know how to take advantage of the law. The former means someone passed a drivers test, the latter, a state bar exam.

And just because a financial advisor has a series 7 & 63 or 66 license doesn't mean they know shit about high finance, investing or fiduciary matters. One of the most sucessful financial advisors I know, and people just hand over millions to him on a daily basis knows not how a debenture or derivative actually works, nor the relationship of LIBOR to TED Spread.

Like the others, he passed a test, which proves NOTHING but an adherence to seat smarts, not street smarts. So far, with deadly accuracy we have been correct about: The emasculation of the US economy, the systematic debauch of the dollar, the housing debacle...

Our Dead Pool favs: Countrywide, IndyMac, Bear Stearns, FNMA, FHLMC, AIG, Lehman Brothers & WaMu.

We take no solace in our national shame, it is a true disgrace in which the ultra rich, republicans and democrats have proven, they are not capable of running this country, they can only ruin it.

In closing, sometimes being right isn't everything, for taking solace from the misery of others was not in mind when we so aptly forewarned.

Regards,

The Nattering One

Comments

Babalooee said…
Dear Mr Nob,
As admirable as it is not profiting on life's necessities, it gets difficult drawing the line where those necessities stop and start. I have no means of drawing that line and I certainly don't trust anyone else enough to make the determination for me. Sincerely yours, Babalooee