The question is if Fanny and Freddie is the right action at the right time or if it is socialism? Many like to say hey this is an act of the USSR or what have you.
Let me give the perspective of a non-American. Though let me give you the perspective of somebody who likes America, has American friends and is pro-American.
I get a magazine called Stocks. In last week’s stock magazine there was a short article on the investing habits of 2,300 private people worth a total 60 million USD. This study was commissioned by Barclays Wealth.
Before I continue, look at the following image which represents my political leanings (courtesy of www.politicalcompass.org). I have repeatedly taken this test and it always comes out to the same thing: Slightly right, quite a bit libertarian.
Ok what to do with Russia? It seems that there is a new power struggle yes? Between the West and Russia, yes?
Well, not so quick. My brother who works in Russia and keeps me up to date with the events within the land has a different story. Essentially what is happening in Georgia is very similar to what happened with Kosovo. The difference is that Kosovo wanted to be nearer to the West and the Georgian states want to be nearer to Russia. But we can debate this issue round and round and round.
The real question is what do you do with Russia? Answer it depends on your nationality.
Fastmoney and many on CNBC say, "oh look how bad things are in Germany and how we are doing better. And how bad things will get in Europe"
"Debit cards are making us more resilient in this recession… oh wait.. let me take that back…"
CNBC did an entire 3 hour expose on Buffett and I.O.U.USA. Well I don’t agree with everything. Two of his points that stuck with me are as follows:
These two points stuck in my mind because I have talked to quite a few people around this planet and asked, "is it that bad?" The answer is no, it is not that bad. BUT there is a caveat. If the person was conservative and did not buy two or three houses then all is ok. If however the people lived beyond their means then things are not great. Quite a few of those asked, including my wife and I are actually grateful for this downdraft because we could buy homes without paying an outrageous fee. One friend who lives in San Francisco said, "you know it is good that this happened since now we can a house." Meaning they were on the sidelines until now. This information re-affirms my thinking that it is the rich and leveraged that are having lots of problems.
The second issue and it ties into the first is that the creative financing of the past is done for. People will need to save and live within their means. Though this is less of a problem outside of North America, then inside North America.
I am a bullish on the future! Of course I am not buying caviar, and salmon. I am still buying my hotdog’s on special with sauerkraut.
Oil is up over 5 dollars, and why is that? It’s Russia! It’s Fay and its potential to hit something! Oh it’s the rebels in Nigeria that are being rebellious!
WHATEVER!!!
Want to know why oil is up? It’s because Goldman said the following:
LONDON, Aug 20 (Reuters) - Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) reiterated on Wednesday its year-end price forecast of $149 a barrel for U.S. crude oil, and said strong fundamentals were a more important factor than a strengthening dollar.
And what do the lemming fund managers do? Oh they buy oil, because Goldman said it would go up. But of course a fund manager can’t say that. They have to say, "hey it is the rebelious rebels of Nigeria that are the problems."
Lemmings! That’s right, all of you fund managers are lemmings! Folks I have become completely disgusted with these overpaid fund managers. Heck you can get these returns by just investing in ETF’s and waiting for some comments from Goldman or what have you.
But this oil spike will be short lived because there is real demand destruction. People have changed habits and they will use less oil. EVEN in China!
I have two points in this blog entry; analysts that annoy me, and fund managers have capitulated.
It looks like CNBC America is playing with their cast of hosts and giving fresh blood some air time! Good for you CNBC America! Good for you for trying! You make me want to watch CNBC America again!
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