“This game’s in the refrigerator! The door’s closed, the lights are out, the eggs are cooling, the butter’s getting hard, and the Jell-O is jiggling …” That was legendary Lakers’ radio announcer Chick Hearn’s signature way of calling a game early, telling fans the home team won … you can head for the exits before the final buzzer. Chick wrote the book with popular sports phrases like “slam dunk,” “airball,” “charity stripe,” and a “bunny hop in the pea patch” for a traveling violation.
Chick’s our inspiration today: March 2009 I wrote “6 reasons we’re calling a bottom and a new bull.” We scored a bullseye. It was a great run. Net gains over 50% in 2009. Now it’s time for a new call: “Game over, head for the exits.” Bears trashing bulls.
No, no, “it’s a buying opportunity,” says another legend, hedge fund manager, Barton Biggs. Buying opportunity? For who? Remember, Biggs isn’t advising Joe Lunchbox about what to do with his little 401(k). Biggs’ customers are mega-millionaires in his $1.5 billion Traxis Partners Fund. Main Street investors like Joe are prey in his casino. Read on, you decide: As you stare from high up in the nose-bleed bleachers watching the game, staring at a Dow that not long ago was above 11,000 and heading for 12,000. Now the Dow’s sitting on the bench, ready for the showers, weak after a couple airballs around 10,000. No more timeouts. “This game’s in the refrigerator.”
How bad is your bookie’s point spread in this game? A blowout? Will the Dow drop below 9,000 again? Now that it’s broken technical supports, will it drop below 6470, where the last bull rally started in early 2009? Can you handle the nerve-racking volatility generated by Wall Street’s high-frequency traders playing the game at warp-speed with algorithms making thousands of micro-bets in milliseconds, betting billions daily? So who should you listen to? Barton and I arrived at Morgan Stanley about the same time. He stayed decades longer, became one of the world’s leading strategists, advising the kind of high-rollers who also bet at private tables in a Vegas casino.
You remember Biggs: In his book Wealth, War & Wisdom he advises his high rollers to prepare for a “breakdown of the civilized infrastructure.” Buy a farm: “Your safe haven must be self-sufficient and capable of growing some kind of food … It should be well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc. Think Swiss Family Robinson.” Biggs is not advising small investors on what to do with their 401(k)s. If you’re gambling at “Wall Street’s Casino” folks, the odds-makers are betting against Biggs. It’s “game over.”
Wake up! Main Street lost 20% of your retirement last decade …
Only a fool would trust Wall Street another 10 years!
Yes, if you’re channeling Chick, here’s your “mixed metaphor” cue card: “This game’s in the refrigerator … Wall Street won (proof, Goldman’s $100 million profits trading days and Blankfein’s $68 million bonus) … Main Street’s headed for another losing streak … Congress’ lights are out … the refrigerator door’s closing on financial reforms … the lobbyists are laying some rotten eggs, poisoning capitalism … the Tea Party-of-No-No ideologies are hardening … the bull’s Jell-O is jiggling to a flatline … and this market’s going into hibernation, with the bears … run, don’t walk, to the exits, folks.”
But will Main Street exit? Will we ever learn? No. The “Wall Street Casino” makes mega-billions for insiders like Blankfein and the Goldman Conspiracy. Yet “The Casino” is still below the 2000 record of 11,722. So after accounting for inflation, Wall Street lost over 20% of Main Street’s 401(k) retirement money between 2000 and 2010. Yes, Wall Street’s a big loser the past decade. Their advice is self-serving. Period. Given their miserable track record, only a fool would bet with Wall Street. Betting odds are Wall Street will lose another 20% in the next decade from 2010-2020. Yes, today’s market is a “buying opportunity,” but only for “Wall Street Casino” insiders like Biggs, Blankfein and even low level staffers inside “The Casino.” But not for our 95 million Main Street investors, there’s more pain ahead, this market’s dropping.
Correction? New crash imminent, worse than 2008 … Great Depression II? (More)