Over the past few days I have received a good amount of mail from blog subscribers, podcast listeners and clients. Many have mentioned that they are disillusioned. Some are horrified. Others are fed up (no pun intended)! Come to think of it, I do not think that there were any that were, even in the least, happy with the markets even though they gained. It is rather obvious that there is a great deal of confusion out there.
On average, investors are looking for answers while they are having a hard time envisioning the future. For sure, there are a few that think this is just a quick correction and nothing to worry about. There are even those that are all for blame, such as the curmudgeons that frequently come up with a good bashing of the Fed, the media and hedge funds. But when we really look at the situation that is developing, we need not blame. Rather, we need to find long term solutions. The crap layered on top of crud within the financial sector is nothing new, nor will it ever stop without significant intervention.
As we have been busy recalling the Savings and Loan Crisis, we seemed to have forgotten about the CMO meltdown two decades ago and the “rouge broker” fiasco’s we have witnessed during the past many years/months. Lest not we even bring up the forever banished names of Long Term Capital Management or Enron!
One particular email that caught my attention from a loyal podcast listener hit the proverbial nail on the head. It talked directly to the point that it is not only the current administration’s or even the old-guard’s fault that we are in such a disarray. The truth is that out of all of the current politicians vying for the coveted position of Commander and Chief, there is no particular name that brings any feeling of comfort. No one that is seemingly able to come up with anything more than political rhetoric and snippets in an effort to win over votes.
I think that what is happening in the financial arena is immoral. The lust for profit above all else has gone too far. Capitalism succeeds only when trust, and the spirit of fair play is maintained. We are at a critical inflection point and I do not see any existing governmental authority figure who can inspire.
Greenspan left quite a mess in his wake. Now he is off to the hedge fund which is exploiting the downside of the easy credit conditions he himself enabled. This scenario is a microcosm of the morally bankrupt behavior that is commonplace.
Once more, we are in a crisis of confidence. One that will take time to heal. Be sure that once we are back and fully trusting those individuals and companies that help us “create wealth,” they will assuredly cook up another scheme that brings on another financial implosion. Then, the cycle will continue on again and again and again. Feel better?