Let me start by saying this post has little to do with IT at least not directly.

Anyone who knows me knows that today is Friday which is “Dadddy & Maddy date night”, for those of you who don’t know me on Fridays my wife gets to take a break as Mom and enjoy some adult interaction while I get to enjoy my daughters company, usually at Johnny Rockets.  I usually get a hamburger and Maddy gets a hot dog or chicken fingers and we talk about how her week was.  Lately she talks a lot about her good friend Ashna who she seems very fond of.  Tonight we had a really nice dinner and now we are home to “Party Like Rock Stars” (Her words not mine, this is how she articulates staying up and watching a movie with daddy, tonight’s movie selection is Narnia.  With some time on my hands while she enjoys the movie it gives me an opportunity to express my anxieties using the written word.  Anyway this brings me to the point of this post.

For the past 2 weeks I have been listening to people complain about the market.  Today’s train ride into NYC was especially irritating and it seems with each passing hour I get more irritated.  What kills me is in a typical American, spoiled brat like, I want it all fashion every comment places blame on “Wall Street”, corporate CEOs, predatory banks, yada, yada, yada!!!!!  I have yet to hear someone say man I f’d up, I am under a mortgage payment I really can’t afford, I should have known this when I singed up for that Power Option ARM.  I have two BMW lease payments that are nearing their 36 month term, I should have just bought a couple of used Honda Civics, etc… what was I thinking.  My only option is to pull my money out of the market now at a massive loss.  I can’t blame the market for this only my own stupidity, this would not be as big of a deal had if I just exercised better judgment and some prudence.  The following are examples of what I am hearing when listening to people talk about their perception of the economic situation.

• People seemed to think that the market was a high yield savings plan made available to the upper middle class and the wealthy that would continue paying ridiculous returns forever therefore they took a unhealthy position.
• I make 35k (example) a year, 2K a month net, I have no savings and a $500 a month car payment but this nice man in blue pinstripe suit is telling me I can afford a 300K mortgage.  The guy in the suit may be a predator but you let yourself be his prey.  His greed and your greed screwed all of us!
• I sunk all my money into real estate as an investment vehicle assuming the real estate market would continue to endlessly climb.  To compound the issue I used the financial programs developed by the predatory bankers, physicists and mathematicians and completely disregard historical real estate market volatility.  BTW – I have no savings or other investment vehicles and I was relying on the historically documented volatile real estate market defying history this time around.
• I did not find it odd that my monthly mortgage payment was less than the loan amount divided by 360 (BTW – since I have little faith in human beings these days 360 months is a standard 30 year mortgage term).
• etc…..  The list goes on and on.

How depressing is the stupidity depicted above.  To me it is far more depressing than the money I am losing in the market right now.  To quote Ron White, “You can’t fix stupid”.

The bottom line is that if you are one of these people you either hoped to rent a life above your means forever or maybe you thought you would rent for a while with an option to buy in the future.  I am pissed off, the idea or re-capitalizing mortgages so people can stay in homes they could not afford in the first place makes my blood boil!  The Fed is now developing widespread social welfare programs to attempt to resurrect our Stupocracy.  Regulation, social welfare programs and whatever other rhetoric the Fed comes up with will not be an answer for the epidemic stupidity plaguing our countries citizens.

Economies are based on the simple concept of supply and demand.  Sometimes supply creates demand and sometimes demand has a way of finding a supply.  In the case of the financial programs of the past few years let’s not forget that the demand never slowed.  The banks were in a state of economic euphoria so they were not thinking straight, but the vast number of consumers consuming these obviously dangerous products like power option arms, interest only loans, no income verification loans, 50 year fixed rate mortgages, etc… consciously disregarded logic to satisfy greed in many cases.

If we continue on our current path of having our cake and eating it too we are doomed as a country!  We are in a downward spiral because the prophecy is self fulfilling, too many people have leveraged positions in stock market and real estate when they should not, this is forcing massive sell offs because people need cash.  There is no quick fix, politicians are in full bullshit mode with the election 30 days away they want the uneducated and impressionable listening to feel good about their rhetoric when in reality they have no idea what to do about our financial crisis.  The fix here is rational and prudent behavior, yes it is going to take time to undo the irrational behavior of the past but the only way to fix the problem is to sleep in the bed we made.  This is not a domestic problem, the world economy is suffering as bad and in many cases worse than we are.  Only we can fix this mess we made, take some damn ownership and change your lifestyle!

I have carved out a decent life for me and my family, managed to intelligently accrue a decent nest egg which is loosing double digit figures almost daily these days but I am hoping I am intelligent enough and liquid enough to try to capitalize on this.  I am amazed by the 30 somethings in a full panic, taking major losses when they should be viewing themselves as having 30 years of runway to recoup their losses, pushing more money into the market today and lowering their cost basis and decreasing the time required to recoup their loses.  Instead unhealthy positions have many 30 somethings in a situation where absorbing the loss and taking the cash is the only option.

The market is not much different than the blackjack table, but in the market counting cards is welcomed, encouraged and expected.  It is all about being cool, waiting for the shoe to turn and having the bank roll to capitalize when it does.  If you panic, become greedy or spend your bank roll to early you may leave injured!

Tighten your belts, double down on your investments and there may be something at the end of the rainbow.  This is my advice and I am taking it, I am cutting back on personal expenses to double my monthly cash into the market.  This is time for measured investment, dollar cost averaging, reducing your cost basis and buying and holding as the market stabilizes.  Never forget the bottom is 0, but if that happens the cash you pull out of the market will be worth 0 as well, remember the tender you are walking around with is only as valuable as our capital markets, there is no gold bullion backing that paper!

Keep a positive perspective, the markets will turn and hopefully you will be there to benefit in some positive way.