Sushi Money

     Well, after 44 years Navy finally beats Notre Dame!   In a triple-overtime win, Navy rallied to beat the Fighting Irish 46-44.    Just goes to show that when you least expect it, good things can happen.  Hard work, luck and who knows what else makes up a lot of the “fortune” we encounter in our lives.  Many of the Navy players really didn’t know anything about that particular “losing streak” other than it was going on for a while.  That’s as it should be…  what really matters while playing the game is “now” and “today.”   Congratulations Navy!

     It reminds me of the market action we’ve been seeing lately, and how the U.S. economy is described in the background of the credit crunch and housing challenges.  The news is pretty much all negative… and all we seem to hear is what is wrong with the U.S. economy, and the risks we face.  People hang on to the last bit of negative news and begin stringing it all together… jumping on a bandwagon of pessimism.  But there’s a lot of good things happening in the background of all that negativism.  We may not hear about for a while, but it’s still there. 

     I don’t know about you, but I see this as a “crisis in confidence” that is being led by institutions and big investors.  And the Fed is in the middle working their balancing act.  I’m not saying that the housing, mortgage and other consumer-related issues are not relevant, because they are indeed pivotal.  But I do believe they are not as big an issue as many institutional investors are making them out to be.  In many ways this is an institutional battle… credit, liquidity, profit and loss… all issues that banks and other institutions are wrestling with on the basis of their investments… good credit, or bad credit, earnings, etc.  I believe the real issue has to do with confidence in our financial markets as a whole, and the ability of the U.S. economy to bounce back.  The same theme  about confidence that we’ve seen for several months now.  If this confidence crisis spills over to the consumer en masse, then I think we do have a real problem.  Right now it’s mostly the institutions that have been going nuts.

     Some folks… even some pretty smart folks, are throwing in the towel and running away from the challenges they see.    Now what kind of reaction is that?   Do people like that really believe they are going to be better off, or is it just a temporary exodus, like an economic vacation?  Gotta do what you’ve gotta do I suppose.  And for those who aren’t physically moving overseas, they’re sending  money it seems.  This year has marked a peak of huge investments into international markets.   Personally I think they’re late to the party, and I wouldn’t want more than 15%-20% of my portfolio in international bonds and equities.

     We’re still going to see a lot of ups and downs in the markets here in the U.S., but at some point things will stabilize.   Probably not while we keeping hearing challenges facing companies like Merril Lynch or Citigroup, but I just don’t believe it’s as bad as many people think.  The economy is still growing, and companies will continue making a lot of money.  We’re almost to the start of the grandest competition the U.S. population knows with the U.S. Presidential election beginning in earnest in a couple months.   The economic rhetoric will continue to increase, and the volatility as well.  So many questions remain. 

      And I’m sitting squarely in the camp that believes we’ll be just fine.  I believe too strongly in the national strength and vitality that the U.S. represents.  I know we can solve the challenges that we’ll face in the months ahead.  I’ll keep investing in my own house, my own country, for a while.  Reminds me of the movie Finding Nemo and the words spoken as they journeyed into the deep, black depths in search of answers, “Just keep swimming… just keep swimming…”    

No comment - Post a comment

« Some Thoughts for a Penny | Raise Your Hand- Are You an Investing Loser? »