Thursday, November 20, 2008

Witnessing History

At the same time that I am sort of "proud" to be witnessing history, it's not quite the same kind of "proud" most people would think of. We've reached new lows on the general indices, not seen since the 97-98 run. Here's a chart showing the relative bear markets and how long it took for them to bottom, courtesy of NYTimes. And keep in mind that the chart presented there is from Oct. 11, and we're down much farther than that now.

You'll see that we've fallen harder and faster than any of the previous bear markets, and there really is not a sure bottom in sight. My prediction to see new lows this year was true, but I believe there are still more lows to come before the year is over. Furthermore, more lows next year after Obama is inaugurated.

Maybe I'm so giddy and "proud" because I wasn't caught on the wrong side in this bear market. And, that got me thinking. Is it bad for me to be happy to see stocks tanking? Sure, I'm profiting from this, but at what cost? I know for certain that a majority of your parents 401ks and IRAs are probably down 50%+ since the start of this year, and that certainly doesn't help out your family. So in a way, I'm glad that I'm doing well, but sad for everyone else. Yet, at the same time, I feel like there's a sense of, "well if you didn't see it coming, you deserve it." And in a way, I really do feel that way.

But, as I type this, I realize that no one deserves to be financially wiped out. No one wants to see blood on the streets. But, the reality is that there will be blood. It surprises me that people still laugh when they hear that we're headed into a recession, or a depression. They don't seem to grasp the gravity at what is at hand. We're about to take the markets another 10-20% lower, and completely wipe out a generation of "buy and hold" investors. I've heard from many people, that those that were wiped out by the Tech Bubble crash of the 2000-2002 bear market, have never returned to the markets because of how scared they are now. And here's the problem, losing a generation of investors results in a market where there is just not enough buyers to step in. Ever heard of the "Lost Decade" for Japan? Well, if not, here's a quick refresher and an editorial on if the U.S. might have it's own "Lost Decade."

The warning signs are all there, if you don't prepare yourselves, well truly I can say you deserve it. People have been laughing in a way when I say I'm thinking about getting a gun- but I'm serious. When people start losing massive amounts of money, no jobs to be obtained, and a trip to the grocery starts becoming as expensive as a PS3, there will be civil unrest. And when you get that, you get problems. No, that does not mean I'm going to become a vigilante maverick, but you never know in an environment like that when you may need that kind of protection.

One last thing on my mind... to my own generation:

We've lived in a time where all we've ever known was a sense of entitlement to everything. We've lived in a generation where, for the most part, we've believed in the government and that they do what's best for us. We've lived in a generation where, there is always safety and comfort in the homes of our parents. We've lived in a generation where we only hear about the pains and sufferings during the depressions of the past- and yet probably still don't truly understand.

The harsh reality is that we are entitled to nothing. We deserve nothing, and yet we feel like we deserve it all. We've heard about the depression and recession, but believe they'll never come because we are happy and content with our iPods and HDTVs. How can they ever disappear, right? We believe in our government and let them do their thing, and yet they do things that are in the best interests of themselves, and the people that put them on a payroll. We believe in democracy just because we can vote, but democracy is currently dead in our country. Democracy is something that comes from active, independent-thinking people who actively pursue the "Democracy" that we on the other hand, fake ourselves into believing we have. Democracy is the people.

In the words of Lincoln,

"Democracy is the government of the people, by the people, for the people."

Like a true conservative, in a depression, I'm going to stick to my guns and religion. I truly hope there will be better days ahead, but the facts that face us do not depict that hope.

1 comment:

Michael said...

stick to your guns. literally.