Easy Al and now Benito have transformed the stock market and other markets from gauges of the economy to generators of economic activity via their deployment as asset bubbles.
Ergo one must now be a technician to not only navigate and profit in the markets but to insure against a career-ending misadventure, either on the downside or upside.
Yesterday Bernanke said the recession has probably ended. If the recession has ended shouldn’t the Fed at its meeting next week at least stop QE and the massive monetization of mortgages?
Benito: “Even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time”.
Most everyone realizes that despite Bernanke’s assertion, there is no exit strategy for the Fed and US government so the implementation of an exit strategy is months into the futures.
Recession Produces Retirement Planning Worries
“The recession is a wake-up call for many Americans and their response is an appropriate one,” said Keith Brannan, vice president of Financial Security Planning at Country Financial. “By preparing for and navigating an economic downturn with smart planning, they are more likely to take the actions needed to achieve financial security no matter where they are starting from.”
However, while Americans may have an increased focus on their finances, they are not necessarily upbeat when it comes to their golden years.
The Compound Return Shell Game
The investment industry standard of relying on time-weighted, compound return percentages as the principal tool for evaluating client portfolios and adviser performance has been a bad idea ever since it was adopted at the birth of the modern wealth management industry.
Compound returns are as meaningless a measure of what actually happens to a client’s wealth as a ruler is to measuring temperature. The industry should finally quit using it and get down to managing wealth, instead of trying to manage returns.
Hypothetical benchmarks cannot measure the effect of the behavior of individual clients on their financial situations. Beating a market index on a compound rate of return basis is like comparing air quality in a vacuum tube with air quality on a street corner. In the vacuum there is no emotion. Theoretical value just sits there, undisturbed by fear greed, or the curveballs of life.
Green shoots? It’s a year to the week since the global financial system seized up, and recovery is what’s on every decision-makers mind. Will it be U-shaped, V-shaped, L-shaped, or J-shaped? My answer is: none of the above. The only recovery that matters is M-shaped.
Here’s a short economic history of the USA, 1988-2008: Americans were fat, lazy, greedy consumers who lived beyond their means. Right? Wrong. That narrative can be read in many places, but it’s as false as a liar loan. The economics reveal a very different truth.
Most Americans took on significant amounts of debt not just because they wanted to, but because they had to.
Let’s summarize. What is awesomeness? Awesomeness happens when thick — real, meaningful — value is created by people who love what they do, added to insanely great stuff, and multiplied by communities who are delighted and inspired because they are authentically better off. That’s a better kind of innovation, built for 21st century economics.
I’ve talked to many boardrooms about awesomeness. Beancounters feel challenged and threatened by it, because it feels fuzzy and imprecise. Yet, it’s anything but. Gen M knows “awesomeness” when we see it — that’s why its part of our vernacular. It’s a precise concept, with meaning, depth, and resonance.
What makes some stuff awesome and other stuff merely (yawn) innovative? I’ve outlined my answers, but they’re far from the best, or even the only ones — so add your own thoughts in the comments.
You might be innovative — but are you awesome? For most, the answer is: no. Game over: in the 21st century, if you’re merely innovative, prepare to be disrupted by awesomeness.
