retirement advice from the experts

I could not help but notice that three "eminent" financial institutions sent me invitations to retirement planning and wealth management seminars last week. I have received many such invitations before, and they come in a variety of "packaging."

Some are mere cardboard flyers sent out to everyone and their brother as part of our daily dose of junk mail. Others are printed on fine stationary and seated in thick padded envelopes. Some even include handwritten sections. All are there to let me know about seminars that will teach me how to manage my (non-existent) wealth or to plan my (still-far-off) retirement.

Isn't it somewhat ironic that the very people who are either teetering on the edge of bankruptcy or who have already gone over, are proposing to show me how to manage my money? The very same people who are now screaming for a government bail-out. Presumably, their track record speaks for themselves? It speaks louder to me than their gilded names, exquisite logos, copperplate, and stylized images that are supposed to evoke a sense of security, stability, and wisdom.

Here are a posy of "experts," certified with MBA's from the finest business schools in the country, who could not even manage to keep a financial firm going. An entity with no real operations, no equipment or hardware to take care of, no elaborate labor contracts, no complex logistics. A firm where people bring money in the back and you lend it out to someone else in front, reaping fees, commissions, interest, and other benefits for simply moving funds around.

Not only do the fat cats on Wall Street need my tax money to survive in their moment of need, they have simply have no shame. They have the audacity to want to teach something they obviously do not understand. Which goes to show you that their one and only skill and the source of their riches, is deception pure and simple.

lack of leadership

One thing was very apparent yesterday: there is a total lack of leadership in Washington. The president is a lame duck, the speaker of the house preferred to engage in partisan politics at the worst possible time, and neither one of the presidential candidates lifted a finger to avert the crisis. One was hiding for fear of being blamed, while the other went on lecturing about the excesses of the past.

As a result $1.2 trillion in equity disappeared over a span of six hours. That is a lot more money than the proposed $700 billion bail-out plan so hotly debated.

What is happening you may ask? 

First, the country is angry. People, who once gladly participated in spending money they did not have, are now faced with foreclosure, job losses, high food and gas prices, and endless bills. In many cases, the situation is entirely of their own doing, but they want someone else to blame. And what better candidates than the rich bankers and CEO's on Wall Street?

Second, the country does not understand. Their anger blinds them. They have an aversion towards taxes, preferring to get things for free and not have to pay the bill. Their representatives are too busy blaming the other party to explain to their constituents what is really happening and the news media are making things worse by proclaiming the crisis too complex to understand. It is not.

Third, everyone in Washington is too busy trying to figure out how they will benefit from this mess. How they can most efficiently blame it on the other guy. For many that means, how they can get back at the White House for all the pain and frustration it has dealt them over the past eight years. Bipartisanship disappeared under Bush and now that it is needed it is nowhere to be found.

Lastly, those very same politicians are afraid of their own seats. The more unsure they are about re-election, the more likely they were to vote no on the rescue package. Rather than doing the hard thing and trying to explain to their constituents what is wrong, they prefer the easy way of "teaching those greedy bankers a lesson."

The solution is extremely simple folks. The $700 billion is, as one journalist called it, the most expensive psychotherapy ever. It is all about confidence. People need to trust one another and they need to feel confident that the US will stand behind its financial system. If that confidence fails, nobody will be willing to lend money and the economy will come to a standstill -which will be good for the environment by the way, so why complain?-.

Once people lose confidence and trust, things can quickly unravel. Very quickly and very profoundly. A Great Depression II is not out of the question. I don't buy the WSJ argument that the wealth of doomsayers will prevent another GD scenario. While it is true that most disasters happen when people least expect it, some disasters do happen even when they stare you in the face.