Proud to be a bear

The Yorkshire vet "James Herriot" wrote of a rich farmer whose principle was, "When all the world goes one way, I go t'other."

Barry Ritholtz publishes a report by James Bianco saying that the Investor's Intelligence survey of investment newsletters shows bearishness at its lowest since 1963.

When nearly everyone agrees, nearly everyone's wrong. The system hasn't been fixed yet and we haven't yet had to face up to the full cost of the consequences. I'm not an active trader - how can you beat the City gunslingers? - so instead of trying to predict the waves I look for the tide.

Until the British Government withdrew Index-Linked Savings Certificates, I'd have settled for them, since I'm more interested in not losing than in making a killing. Now, and until money velocity levels out and QE leads to serious inflation, it's cash for me, plus, reluctantly at these prices, gold.

I agree with Mish:
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1. Gold has been sinking, as it should, if Congress is fiscally prudent.
2. Government Should be Prudent
3. Government Won't Be Prudent

Should Congress be fiscally prudent (and the fiscal cliff is not close to being fiscally prudent), I would change my stance on gold in one second flat.
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Proud to be a 5%-er, then.
 
Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

Cause for outrage: what bankers and traders have done to "the people"

"When floodwaters cover our homes, we expect that FEMA workers with emergency checks and blankets will find us. There is no moral or substantive difference between a hundred-year flood and the near-destruction of the global financial system by speculators immune from consequence. But if you and your spouse both lose your jobs and assets because of an unprecedented economic cataclysm having nothing to do with you, you quickly discover that your society expects you and your children to live malnourished on the streets indefinitely. "

- From "The Sharp, Sudden Decline of America's Middle Class" by Jeff Tietz, Rolling Stone magazine. The article details the harrowing experience of recession victims, many of whom have done "all the right things" and never been unemployed before.

Inequality is starkly worse in the USA than in other "developed" countries, as shown in the graph below (source):

 

 

That uses data from 2010, but according to the official Census it's getting worse:

 

"The Gini Index for the United States in the 2011 ACS (0.475) was significantly higher than in the 2010 ACS (0.469). This increase suggests more income inequality across the country."

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Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

Where are the rich investing?

Last week I visited a successful Midlands brokerage. The boss was looking where to invest tens of millions of pounds for a client.

Stocks, bonds, real estate, commodities?

No: cash.

He'd found somewhere that offered 3.6%. Security of capital, and protection against our current moderate inflation.

How many individuals and corporations around the world are doing much the same? Are they waiting for the optimistic losers to slug it out, before stepping in and buying up when everything gets cheaper?
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Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.