Thursday, December 25, 2008

Frail Grasp on the Big Picture?

Christmas morning . . .

Friends will arrive this afternoon at two for a late lunch.

Before then we will take the dogs for a long hike -- it makes them a bit more mellow in the afternoons. They will beg for food from our guests, get their fill, and then curl up on the floor while we chat.

But I sense the topic this year will be different -- not the newest IPhone or GPS or whatever toys were selected as "the ones to have" this year. Rather, the topic will be the economy.

Bush, of course, ended up bailing out the auto industry for a few months with a ticket price of $17 billion. With all the other bailouts, various wars and conflicts, and other seemingly indiscriminate spending, some economists estimate we the taxpayers will be left with a $2 trillion deficit by the time Obama enters office.

Everyone hog seems to be at the trough these days -- even hedge funds for the rich have gained access to $200 billion in federal aid. There's not a capitalist to be found in America these days. When the going got tough, the capitalists put their hands out like beggars in Zegna suits.

What the total tab will be of government nationalizing the banking and auto industries, which seems only the beginning, remains to be seen, but my guess is that it won't be pretty. That will be our Christmas discussion this year, along with various options on how best to deal with the fallout, for our clients and individually. Some of us attending today learned about making money in the short side of the market in 2008, highly effective but there seems something inherently sad and ironic about betting against the very market upon which we all depend.

Of course, as I am sure more than one will observe, "We're not betting against the market. The market bet against itself when it went to the government." I happen to agree with that sentiment, which either means I have a frail grasp on the big picture or simply recognize that the big picture has changed.

As we await our guests, whatever your topic of discussion today, in the end remember that it is just moonshine. The real thing, that which is important, is our opportunity to be with friends and family. They, not our brokers and bankers, will be by our sides in the tough times, and you will be there for them. Of course, no one has to say it because we know it in our heads, but mostly in our hearts.

Best to everyone for a wonderful Christmas and 2009.


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